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Globalisation of Law

Globalisation of Law

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Globalisation of Law

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  1. Globalisation of Law Peter Charlton London Managing Partner – Clifford Chance 13 January 2003

  2. Summary • My perspective • About law firms! • The Law Firm market • Historical overview • The development of Clifford Chance • What next?

  3. My perspective • Started legal career in 1979 with Clifford Chance • Specialised in Company law/Mergers & Acquisitions • Became a partner in 1986 • Became Managing Partner (Corporate) in 1993 and Managing Partner (London) in 2000 • Practitioner/Manager not an academic • Totally subjective

  4. Partnership model – compared to other professional services organisations – accountants, management consultants, investment banks etc About law firms! (and lawyers) (limited access to capital) • Flat structure • Highly consensual • Conservative – management resistant • Individualistic and independent • Regulated and jurisdiction based • Relatively slow to internationalise

  5. About law firms! (cont’d) • Business law firms • Other practices (divorce, family, criminal, wills and probate, residential conveyancing, welfare and immigration)

  6. About law firms! (cont’d) • Corporate • Finance • Capital Markets • Litigation and Dispute Resolution • Real Estate • Tax, Pensions & Employment Business law firms – distinguished by work type

  7. About law firms! (cont’d) • Banks, insurance companies and other financial institutions • National, regional, global corporations • Markets, governments, government agencies, local authorities etc … and distinguished by client

  8. High Specialists Shapers Profit Incumbents Full service integrators Full service integrators Low Large Small Size Source: McKinsey Law firm market

  9. 1980 1400 1300 Specialists Shapers 1200 1100 1000 900 PPP (£000’s) 800 700 600 500 400 300 Full service integrators 200 Full service integrators Incumbents 100 0 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Law firm market (cont’d) No. of fee earners

  10. Law firm market in London 2001 1400 Specialists Shapers 1300 1200 S&M 1100 CC Freshfields 1000 L’laters 900 A&O PPP (£000’s) H. Smith MacFarlanes 800 700 Lovells Ashursts 600 Gouldens N.Rose 500 TSB DLA T. Goddard S&S 400 Eversheds CMS 300 HSE S.Harwood 200 Full service integrators Incumbents 100 0 0 200 400 600 800 1000 1200 1400 1600 1800 2000 No. of fee earners

  11. Law firm market - Global Shapers Specialists 2000 2002 WLR 1900 1800 1700 1600 1500 CSM 1400 DPW 1300 PPP (£000’s) STB 1200 PW S&C MT 1100 SA 1000 S&M 900 800 LL AO FF CC 700 JD 600 500 B&M 400 300 Full service integrators E 200 Incumbents 100 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400 3600 No. of fee earners 1000

  12. Historical Overview • 1860 – 1900 • Apex of British power and influence • Establishment of English law as accepted system in international trade and contractual relations • City of London is the dominant international financial market

  13. Historical Overview (cont’d) 1860 – 1900 • Establishment of US nation and unification of Germany • Industrialisation of US and German economy • Creation of single US market • Development of national brands in US • Immigration to US • US overtakes the UK in industrial production

  14. Historical Overview (cont’d) 1900 - 1945 • 1914 - 1918 First World War • Boom/Bust – 1929 crash and Great Depression • 1939-1945 Second World War • Decline of UK as world and economic power

  15. Historical Overview (cont’d) 1945-1980’s • Consolidation of the US economic position • Cold War • Reconstruction in Europe – creation of EU • Technological and Communications revolution • Regulation and Deregulation

  16. Historical Overview (cont’d) 1980’s - • Industrial Consolidation • Development of service economies • Rapid technology and Communications development • Privatisation • Deregulation of markets • City maintains position as international financial centre • US – dominant global capital market – increased importance of US law • Increasing sophistication and complexity • Anglo Saxon transaction techniques dominate

  17. Coward Chance(Est 1802) 2000Mergers with Rogers & Wells (US) and Punder (Germany) 1987CLIFFORD CHANCE Clifford-Turner(Est 1900) The Development of Clifford Chance

  18. Development of Clifford Chance – Offices worldwide 2003 Berlin (95) Luxembourg (55) Budapest )80) Munich (93) Prague (43) Moscow (84) Warsaw (86) Frankfurt (776) Dusseldorf (218) Amsterdam (297) London (2,520) Tokyo (68) San Francisco (64) Brussels (104) Palo Alto (7) Paris (462) Shanghai (35) Los Angeles (15) Madrid (198) San Diego (11) Beijing (26) New York (964) Barcelona (55) Hong Kong (367) Washington DC (169) Milan (138) Bangkok (64) Padua (13) Rome (57) Singapore (53) Dubai (50) Sao Paulo (33)

  19. Development of Strategy • Development outside London initially small scale, opportunistic and partner/client led • Merger in 1987 provided impetus and released energy • High ambition, need to differentiate and willingness to invest • By 1989 – strategy developed to be the leading European Firm • By 1999 – strategy developed to be the leading Global Firm • Mergers in 2000 in the US and Germany

  20. Merger with Rogers & Wells and Punder Coward Chance and Clifford-Turner merger 1991 Moscow 1802 London 1962 Paris 1972 Amsterdam 1976 Dubai 1980 Madrid Hong Kong 1981 Singapore 1986 New York 1990 Frankfurt 1992 Warsaw 1993 Barcelona Milan Rome Budapest Shanghai 1996 Bangkok 1998 Sao Paolo 2000 Luxem-bourg Beijing 1974 1968 Brussels 2003 1999 Washington 1987 1995 Prague 1997 D’dorf Padua San Francisco Palo Alto San Diego Tokyo Los Angeles Offices closed: ChicagoBahrainJeddahRiyadhBahrain Berlin Munich Sharjah LeipzigHo Chi Minh CityHanoi Development of Clifford Chance – Global Network

  21. The firm is now truly global … World-wide Revenues by Region - FY2001/02 £1bn Middle-East 0.5% Americas 24.7% London 42.5% Asia 7.3% Continental Europe 25.0%

  22. … and well balanced across practice areas World-wide Fees by Practice Area - FY2001/02 £1bn Tax Pensions & Employment 8.5% Banking & Finance 22.4% Real Estate 7.5% Litigation & Dispute Capital Markets Resolution 11.7% 22.0% Corporate 27.7%

  23. Balance of practices is different across practice areas in certain regions

  24. What next? • Economic uncertainty • Slow down/recession • Further consolidation • Increased regulation • Forces of globalisation continue

  25. Law firm market - Global Shapers Specialists 2000 2002 WLR 1900 1800 1700 1600 1500 CSM 1400 DPW 1300 PPP (£000’s) STB 1200 PW S&C MT 1100 SA 1000 S&M 900 800 LL AO FF CC 700 JD 600 500 B&M 400 300 Full service integrators E 200 Incumbents 100 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400 3600 No. of fee earners London-1/1335846/2

  26. Questions