We gathered opinions from legal professionals on their hopes and plans for this year, and what they have done to survive the past tumultuous years. Putro Harnowo reports
A
lthough the world is still grappling with the turbulence of trade tensions and conflict, supply chain disruptions and an expected recession, Asia’s legal market remains hopeful. Not as hopeful as in the past, perhaps, but bold enough to be projecting upticks in various legal practice areas.
There are good reasons, not least the diminishing impact of covid-19 and with that the reopening of China as a long-awaited milestone in Asia’s post-pandemic era.
Asia Business Law Journal’s survey of 101 law firms in the region finds the majority of respondents in buoyant mood for the year. More than half (60%) are optimistic or very optimistic about their future in 2023, significantly down on last year’s survey, when 93% of those surveyed were upbeat, as published in our November/December 2021 issue. Not surprisingly, only 56% of law firms admitted their revenue increased in 2022, down from 74% in our previous survey.
However, most seemed to agree that adopted technologies would stay, and keeping top talents is being the key to survival during uncertain times. More than half (57%) of law firms in the survey kept their headcounts the same, and 32% added to lawyer numbers this past year.
Our recent survey of law firms in 16 jurisdictions also discovered that many lawyers cautiously cope with pandemic-induced change in different ways.
As the travel restriction is lifted, Wang Kai, a Beijing-based partner at JunHe, sees that reconnecting with clients is imperative. “First is to recover the relationship with those foreign clients, who have not been visited in the past three years,” says Wang. “The second is to participate in more commercial events to expand the firm’s presence.”
In terms of client portfolios, Wang says that demands from state-owned and domestic private enterprises will increase to fill the gap left by foreign companies that have gradually reduced their activities in China.
Yu Xin, a partner at Jingtian & Gongcheng in Beijing, agrees. “As clients resume their active business status and rhythm, we will participate more in their business and help them get ahead,” says Yu.
The law firm, according to Yu, will continue to co-operate with top legal, human resources and media partners, and give more focus to major projects and clients, in addition to conducting high-quality research, writing and seminars on cutting-edge issues.
Meanwhile, John Formichella, a partner at Formichella & Sritawat in Bangkok, believes that keeping the team lean and focusing only on maintaining fee earners to monitor the firm’s service is the proper way to go.
“We have adopted a low overhead model, reduced our reliance on physical office space, and used more outsourced services, such as accounting, to focus on high-quality fee earners,” says Formichella. “We are also considering merging with other boutique practice groups.”
In Dhaka, Ferdaus Rahman, partner at Bangladeshi firm AS & Associates, says the pandemic has led to mastering a better work-life balance and remote working, as well as allowing better and expedited client service.
“For clients, alternative billing packages for small and medium enterprises (SMEs) have been developed to keep the expense for legal fees in an affordable range,” says Rahman.
“We are planning to move closer to clients through local branches, and targeting SMEs through flexible and variable billing packages.”
Bui Ngoc Anh, managing partner at Vietnamese law firm VILAF in Hanoi, says the strong recoveries of key economies investing in Vietnam, and the full opening of the Chinese economy, will be key issues affecting the firm this year. Anticipating this, VILAF is focusing on internal training.
“We have been focusing more on our internal capacity building to better equip all lawyers and staff,” says Bui. “At the same time, we are also trying to spend more time meeting and talking with our clients to better understand their businesses and issues.”
Leveraging tech
Technological adaptation has been the most common strategy adopted by law firms to survive the pandemic crisis. Although many have enjoyed the fruits of digitalisation in making life easier, only 30% of law firms admit to implementing legaltech.
Still, like it or not, technology will always push lawyers to catch up for their clients, and our survey pointed to a number of law firms that can stay relevant in the market.
Hong Kong has been doubling efforts to become the region’s legaltech hub. Rossana Chu, managing partner at LC Lawyers, has teamed up with EY global network for technical assistance and training resources surrounding blockchain, fintech, artificial intelligence, innovation, data strategies, cloud-based services, and sustainability to provide integrated services to clients.
“We have been exploring new ways to provide services such as via legaltech,” says Chu. “We made steady progress in expanding our practice areas such as technology law, advice relating to non-fungible tokens and other virtual assets, while at the same time strengthening the depth and width of clientele in current practice areas such as M&A, capital markets, asset management, litigation, data protection, employment, compliance and regulatory investigation.”
To streamline legal work and improve productivity, Chu puts more focus on dealing with difficult engagements, which require greater more lawyering skill and enable the firm to build trust with clients, rather than simple or more commercialised tasks.
“We anticipate that the equity capital markets in Hong Kong will pick up in the second half of 2023, and so will M&A transactions,” says Chu.
Learning from the pandemic, Huang Hui, managing partner at Huang & Huang in Guangzhou, also believes in investing in digital technology.
“[We will] continue to upgrade legaltech to enhance work efficiency, and strengthen industry networking by co-organising legal forums and providing lectures for VIP clients,” says Huang.
“We have just expanded our office space with the addition of a large conference room, to meet the increasing number of virtual meetings and hearings and have provided separate offices for all lawyers with more than five years of practice.”
Wang, of JunHe, has similar strategies to incorporate artificial intelligence software. “Lawyers [at the firm] will be required to combine more artificial intelligence and software with their routine work stream,” says Wang. “A centralised knowledge database has already been established by the firm, which will collect the precedents, templates and expertise from different practice groups and provide convenience to each other.”
In Manila, IP boutique law firm Federis and Associates has been working towards an automation process to ensure quicker and more efficient processing of data and easier access for lawyers and paralegals.
“We have signed on with an outside company whose online platform allows it to reach companies who need immediate help in pending trademark prosecution issues,” says Mila Federis, the firm’s co-founder and managing partner.
“We will also create an online system to ensure more efficient case management and storage.”
Malaysian law firm Rosli Dahlan Saravana Partnership in Kuala Lumpur has invested in technology to facilitate virtual hearings in court, as well as meetings, and events.
“We are improving our information technology to identify technology work systems that can enhance our lawyers’ productivity, while our executive committee will be implementing quality monitoring systems to ensure higher productivity will be consistent with improved quality,” says partner Rosli Dahlan.
“Several developments are taking place that can affect the marketplace – accounting firms are either setting up their own legal units or having formal alliances. As an independent law firm with an objective to be the market leader, we need to adapt.”
Sridhar Gorthi, partner at Trilegal in Mumbai, says that technology has also been very useful for market positioning and outreach, especially after the launch of the firm’s website in January last year.
“We instituted guidelines for leveraging social media, as a channel for the firm to communicate with its audiences,” says Gorthi. “In addition to the website and social media platform, we have expanded our digital presence through content marketing and online event partnerships with leading third-party platforms. We will continue to emphasise these areas going forward.”
Working closely with the founding partners, Ishita Dasgupta, associate vice president at Spice Route Legal in Bengaluru, is seeing the advantage of technology to assist in legal work. “We will be exploring new applications in legaltech and legal practice management software to increase efficiency and improve processes across the firm,” says Dasgupta.
PM Thimmaiah, founding partner at MD&T Partners in Bengaluru, says a different strategy is to finding a niche. “The firm is involved in identifying specific underserved segments of the market and focusing on meeting the needs of that particular group,” says Thimmaiah. “By specialising in a particular area, the firm can stand out and attract a dedicated client base.”
To improve productivity and streamline the workload, Thimmaiah normally assigns dedicated teams for each client or project, in addition to investing in technology. “This allows team members to become familiar with the specific needs and requirements of each client, and work more efficiently as a result,” he says. “The firm has previously set in place processes to streamline work and improve productivity, by use of technology. The intent is to further customise the software in the coming year to enhance user experience and efficiency, based on the experience garnered.”
Retention and expansion
For the legal industry, retaining and attracting top talent is a key strategy for law firms to stay ahead of the competition. Increasing hiring activities also brings the firm’s focus onto specific industries or practice areas.
“India has seen high growth in the past few years, and this has fuelled talent demand in all industries, including the legal sector,” says Gorthi, of Trilegal. “Further, the pandemic has changed the way business is conducted and talent is nurtured. As a result, top talent today has many more avenues to consider when building a career.”
The legal sector in India has seen talent move between law firms, in-house counsel, and increasingly legaltech companies, according to Gorthi. To overcome this, Trilegal has invested in its people and introduced relevant policies so that lawyers can perform to their best abilities and develop a sense of belonging. This including a hybrid-working arrangement, where employees split their time between the office and remote working.
Improving working conditions is also a good way to go. As the world returns to normalcy, Abir Lal Dey, a partner at Saraf and Partners in Mumbai, is proceeding with the hybrid work arrangement watchfully.
“We are excited but also cautious about the mental well-being of the lawyers, and are giving them time to readjust to the changes, especially the newcomers,” says Dey. “We have implemented various measures to give comfort to employees to overcome any sudden changes in the working environment.”
Dasgupta, of Spice Route, says that the firm has successfully retained more than 90% of its lawyers despite the “great resignation” across the industry last year, along with the adoption of a hybrid model to replace the conventional full-time working arrangement.
“Flexible hours and a refreshing change of environments have been proven to increase efficiency and focus across our teams, in addition to reducing commuting costs and time,” says Dasgupta. “The digital transformation experienced by the firm in the past three years has also increased collaboration across teams based in all corners of the country, and also with our partner law firms across the globe.”
Meanwhile, in China, despite an economic slowdown, Jenny Li, a partner at Merits & Tree in Beijing, has a positive outlook as she sees the firm growing with more diversified practice areas.
“We did not lay off lawyers in 2022, as our business is still growing in general and more partners have joined,” says Li. “We may have internal adjustments first between divisions such as capital markets, with robust growth this year, and downside areas such as private equity and venture capital, and M&A.”
Li says that the firm has set up a cost centre and built up a team in Wuhan to handle some labour-intensive work and relatively standard assignments.
“Our firm has established an integrated system, where our training, recruitment and knowledge management are centralised,” she says. “We will further improve our integration system and enhance co-operation between different areas and teams.”
Li expects startups and tech companies will encounter restructuring, acquisition or even winding-up, which will bring more opportunities for M&A, restructuring and bankruptcy teams.
She also expects the competition among law firms will intensify this year, and hourly billing rates may further decrease. As a result, law firms with higher efficiency and more flexibility to accommodate market changes will outperform their peers.
“We will expand our footprints in Hong Kong and other cities in China, such as Hangzhou and Chengdu, by opening new offices in these regions and integrating our resources across different areas of Greater China,” says Li.
Zhao Zhen, a senior partner at Jincheng Tongda & Neal in Beijing, says the firm is expecting to add dispute lawyers to fill increasing demand, in addition to strengthening co-operation with foreign law firms. “We are currently resolving lots of cross-border disputes, and as the world reopens the number of such disputes increases,” says Zhao.
In Taiwan, Hung Ou Yang, the managing partner at Brain Trust International in Taipei, says that although the pandemic negatively impacted the business, the firm is expanding and will need more talent.
“To prepare ourselves for the increasing demand of international trade and disputes, we have moved to a new location with bigger office space so that we can expand our legal team to cater to more business and legal opportunities when the border has been reopened,” says Hung.
“We are aiming to hire more lawyers with an international background to deal with transnational disputes, which is our main practice area.”
As the world reopens, Hung expects to build more alliances with other law firms worldwide, and anticipates that Taiwan will have more foreign corporations investing in Taiwan this year.
“In the past two years, foreign investment in Taiwan, to a certain extent, has decreased,” he says. “As the border reopens, we are anticipating that there will be more transaction issues, M&A, and related employment law issues that need our legal services from a transnational law perspective.”
Having projects on hold for the past few years, Louie Ogsimer, a partner at Philippine law firm Romulo Mabanta Buenaventura Sayoc & de los Angeles in Manila, says plenty of work is now pushing through following the easing of travel and trade restrictions, and an improving economic outlook.
“We didn’t have a lot of resignations compared to other firms, but we hired more lawyers this year because of the increasing workload,” says Ogsimer.
Federis, at Federis and Associates, concurs. “Government restrictions related to the pandemic have been removed, leading to more in-person consultations with clients to do follow-up work on interrupted projects,” she says. “Big performing practice areas will revolve around the digital and content creation economy.
“IP lawyers will also learn to navigate new landscapes such as the metaverse and AI content creation.”
However, Federis also cautions that the looming threat of recession and the current political climate in the Philippines may affect the firm’s business this year.
Dhinesh Bhaskaran, the managing partner at Shearn Delamore & Co in Kuala Lumpur, says that increased economic activity has fuelled more certainty and confidence in the future of the legal profession. “After the recent general elections, there is likely to be an increase in domestic corporate activity in specific sectors in 2023, resulting in substantially increased legal work in these sectors,” says Bhaskaran.
Dahlan, of Rosli Dahlan Saravana Partnership, agrees. “Transactional practice will realign with the change of government,” he says. “Litigation practice will not be much affected, but we can expect an increase in public law litigation.”
Dahlan hopes 2023 will see more expansion in the firm’s size, clientele and nature of premium work, aiming to be the fastest-growing firm in the country. “We have set a plan to be a regional player, starting by being the highest-paying firm in the country,” he says. “Since 2020, the firm has implemented a flexible working arrangement and provided IT support to our lawyers to operate effectively out of the office.”
Pralakorn Siwawej, a senior associate at Weerawong Chinnavat & Partners in Bangkok, says the pandemic did not bring much disruption as the firm had implemented a policy that lawyers could work anywhere at any time even before the health crisis erupted.
“The firm also helped provide arrays of online tools to help the lawyers get connected with each other and the client,” says Siwawej. “It was proven that the lawyers no longer had to spend unnecessary time for commuting during the rush hours, particularly in Bangkok, which could take hours, and the lawyers could also better manage their personal life and working life.”
Siwawej expects the competition among law firms will be higher this year, and only the firms that can impress clients with signature services and serve their needs will survive in a more competitive business world.
Asanga Gunawansa, senior legal counsel at Colombo Law Alliance in Colombo, also expects an increasing workload following the recommencement of business activities pursuant to the lifting of lockdowns and social distancing measures.
“We have recruited and trained several young lawyers in practice areas such as foreign investment, public-private partnerships and arbitration to cater to any growing demand for legal services when investment and trade activities resume following the pandemic,” he says.
Gunawansa is optimistic about the future. “We aim to collaborate with leading law firms and chambers in the South Asian region with the objective of sharing expertise,” he says. “We see the potential for increased investment in Sri Lanka in 2023, especially in the hospitality industry and the energy and transport infrastructure sectors.”
Digital boom
Zhao, of Jincheng Tongda & Neal, believes the number of cross-border practices will increase in China, and Chinese lawyers will re-enter the world stage, with emerging sectors such as technology, media and telecommunications (TMT) and the metaverse developing rapidly in the country.
“As a result, the legal service market will be more active, and we predict that our legal performing practice areas will expand in 2023,” says Zhao. “The development of emerging distinctive industries attracts many investors.”
Wang, of JunHe, says the geopolitical environment between China and the rest of the world, as well as the development of the country’s opening-up policy, will be exciting to watch this year. “Domestically, data security and trade compliance will remain hot in 2023,” says Wang.
“The metaverse might be a popular subject, but whether it will create a substantial legal practice market is yet to see.
“As for those traditional areas such as M&A and capital market, I personally believe that they are still very subject to the government’s economic policy, and whether the government will uphold the traditional reform and opening-up policy.”
Gorthi, of Trilegal, believes the firm’s largest practice areas – including corporate and M&A, private equity, competition, disputes, TMT, banking and finance, projects, energy and infrastructure, real estate, and employment – will continue dominating this year due to increased demand.
“However, within these practice areas, we expect to see increased interest in certain types of work involving areas such as crypto or digital currency, digital tax, environmental law, healthtech, edutech, mobile gaming, data privacy and protection, and digital IP,” says Gorthi. “We also see some of the traditional practice areas evolving, such as the capital markets practice, which is seeing a rise in special purpose acquisition company [SPAC] deals, and the introduction of non-fungible tokens, which can be in conflict with some aspects of the IP law.”
Dasgupta, of Spice Route, has similar views. “The increased dependence on digital processes will continue to bring in large volumes of work on our data protection, cybersecurity, and TMT practices,” she says.
“With the looming threat of covid-19 returning, and the ever-evolving regulatory landscape of healthcare, pharmaceuticals, sustainability, clean-tech, electric mobility, alternative energy, etc., we also expect a significant boost for our healthcare and energy practices.”
Ben Dominic Yap, managing partner at Gatmaytan Yap Patacsil Gutierrez & Protacio (C&G Law) in Manila, also sees covid-19 as remaining a potential threat.
“We are expecting even more investment, and therefore legal work, relating to energy and infrastructure as our country and other countries continue to move forward from, or despite, the pandemic,” says Yap.
As a dispute lawyer, Siwawej, of Weerawong Chinnavat & Partners, believes disputes will still be hot in 2023, although the types of cases may differ from the previous year.
“We can see that there were many employment cases between 2021 and 2022 because many companies were forced to lay off or cut down redundancy positions,” says Siwawej.
“However, in 2023, this kind of case should be fewer … and it can be seen that the business section is reviving so we should expect more commercial cases from the market, particularly those related to digital assets.”
