Page 106 - MASTER COPY LEADERS BOOK 9editedJKK (24)_Neat
P. 106
Leaders in Legal Business
Communication
As firms become more diverse, effective communication to and from leadership, among offices, and at a
purely personal level becomes more difficult. A default to email can depersonalize relationships. It can also result
in a leadership group permanently being on “transmit” mode rather than ensuring that they “receive” key insights
and constructive challenges from their colleagues.
Communication challenges are compounded by language and cultural sensitivities. Even “yes” can have
many different messages:
The Seven Meanings of Yes
Yes I hear you
Yes I understand you
Yes I understand you and will do as you ask
Yes I understand you but will do nothing
Yes I understand you but will do the opposite
Yes I understand you, but I will speak to others to try to get you overruled
Yes I understand you, but I dislike you and will try to do this in a way that makes
you look bad
Considerable effort is required to ensure that every issue is not seen through the lens of “head office.” No
one location is the source of all wisdom, whatever those based there may think. Indeed, it is by welcoming and
harnessing diverse views and experiences that a firm is able to give the best service to its increasingly multinational
and multicultural clients.
The Future
We are only partway through the process of developing truly global firms and the segmentation of the
global market by types of work, target clients, service offering, price, and profitability.
It is likely that over the next five years the number of $1 billion firms will increase by organic growth and
merger to 40 or perhaps 50 firms. In the medium term, U.S.- and U.K.-based firms will dominate this end of the
market, but we may see more Australian, Continental European, Canadian, ASEAN, and Chinese firms taking a
leading role in the creation of larger and more geographically diverse firms. After the initial phase of development,
it is likely that we will see mergers within the top 50 firms that will create truly global firms and an increasing
segmentation of the international legal market into firms of different types, e.g., capital markets “bet the farm”
firms, high-value firms, upper-mid-tier firms, wide coverage firms, mid-tier firms, and process organizations (the
precise categories have yet to emerge, and currently the classification of specific firms and their position in the
market is in a state of flux). A firm’s branding and what it stands for will become increasingly relevant as this
process develops. It is not inconceivable that by 2020 or shortly thereafter we will see a $5 billion law firm.
For those who think this is impossible, it is important to appreciate that a $5 billion law firm will have a
market share of less than 1 percent of the global legal market at that time. It also needs to be appreciated that new
entrants of the sort allowed in Australia and the U.K. and being considered in other countries are likely to make
the Global 100 list. Indeed, PWC, KPMG, and EY all have alternative business structure licenses in the U.K., so
they can offer legal services there. They have made no secret of their wish to expand their legal services offerings,
especially when bundled with their other services so that they can provide “business solutions.” It should be
remembered that in 2001 Andersen Legal was the ninth-largest law firm in the world by revenue, but it crashed
in 2002 when Arthur Andersen collapsed in the wake of the Enron scandal. The Big Four may make mistakes, but
they are impressive organizations with client relationships and investment capabilities that most law firms can
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Communication
As firms become more diverse, effective communication to and from leadership, among offices, and at a
purely personal level becomes more difficult. A default to email can depersonalize relationships. It can also result
in a leadership group permanently being on “transmit” mode rather than ensuring that they “receive” key insights
and constructive challenges from their colleagues.
Communication challenges are compounded by language and cultural sensitivities. Even “yes” can have
many different messages:
The Seven Meanings of Yes
Yes I hear you
Yes I understand you
Yes I understand you and will do as you ask
Yes I understand you but will do nothing
Yes I understand you but will do the opposite
Yes I understand you, but I will speak to others to try to get you overruled
Yes I understand you, but I dislike you and will try to do this in a way that makes
you look bad
Considerable effort is required to ensure that every issue is not seen through the lens of “head office.” No
one location is the source of all wisdom, whatever those based there may think. Indeed, it is by welcoming and
harnessing diverse views and experiences that a firm is able to give the best service to its increasingly multinational
and multicultural clients.
The Future
We are only partway through the process of developing truly global firms and the segmentation of the
global market by types of work, target clients, service offering, price, and profitability.
It is likely that over the next five years the number of $1 billion firms will increase by organic growth and
merger to 40 or perhaps 50 firms. In the medium term, U.S.- and U.K.-based firms will dominate this end of the
market, but we may see more Australian, Continental European, Canadian, ASEAN, and Chinese firms taking a
leading role in the creation of larger and more geographically diverse firms. After the initial phase of development,
it is likely that we will see mergers within the top 50 firms that will create truly global firms and an increasing
segmentation of the international legal market into firms of different types, e.g., capital markets “bet the farm”
firms, high-value firms, upper-mid-tier firms, wide coverage firms, mid-tier firms, and process organizations (the
precise categories have yet to emerge, and currently the classification of specific firms and their position in the
market is in a state of flux). A firm’s branding and what it stands for will become increasingly relevant as this
process develops. It is not inconceivable that by 2020 or shortly thereafter we will see a $5 billion law firm.
For those who think this is impossible, it is important to appreciate that a $5 billion law firm will have a
market share of less than 1 percent of the global legal market at that time. It also needs to be appreciated that new
entrants of the sort allowed in Australia and the U.K. and being considered in other countries are likely to make
the Global 100 list. Indeed, PWC, KPMG, and EY all have alternative business structure licenses in the U.K., so
they can offer legal services there. They have made no secret of their wish to expand their legal services offerings,
especially when bundled with their other services so that they can provide “business solutions.” It should be
remembered that in 2001 Andersen Legal was the ninth-largest law firm in the world by revenue, but it crashed
in 2002 when Arthur Andersen collapsed in the wake of the Enron scandal. The Big Four may make mistakes, but
they are impressive organizations with client relationships and investment capabilities that most law firms can
99
