ALB Insights February 21, 2017 |
| | | Eversheds-Harry Elias could kick off Singapore’s tie-up season, but finding right partner is key
The Eversheds-Harry Elias merger was just one of three combinations announced in the Singapore market in the past few weeks, and every sign points to seeing more of the same in the near future. But for local firms seeking marriage, the most important consideration is picking the right partner, writes Ranajit Dam
The last few weeks have seen a spate of law firm combinations announced in Singapore. In early February, the UK’s Taylor Vinters acquired a stake in Singapore IP and tech law firm Via Law Corporation to form Taylor Vinters Via, which boasts of “a novel cross-ownership structure,” according to the two parties. At around that time, international law firm Gowling WLG entered into an exclusive association with Singapore IP boutique JurisAsia.
But the one that grabbed headlines was Eversheds Harry Elias (EHE), a merger between Singapore’s Harry Elias Partnership (HEP) and Eversheds Sutherland – itself a product of a transatlantic merger. Touted as a “transformative merger”, or one with full financial integration, it aims to follow the lead of Morgan Lewis Stamford in this regard. Under the terms of the merger, the Eversheds Sutherland Singapore office and business will be being transferred to HEP, with the international partner acquiring a reported 33 percent stake.
Combinations are not new to the Singapore market. Joint law ventures (JLVs) and formal law alliances (FLAs) abound in the city-state. A decade ago, even firms within Singapore’s Big Four were in associations – Allen & Gledhill-Linklaters, Drew & Napier-Freshfields and Clifford Chance-WongPartnership are three that come to mind. Today they are independent, but a number of Singapore’s mid-sized firms – not to mention storied names – have recently entered tie-ups. These include KhattarWong (in an FLA as Withers KhattarWong), Rodyk & Davidson (part of Dentons Rodyk & Davidson now) and of course, Morgan Lewis Stamford, which brought together Singapore’s Stamford Law Corporation and U.S.-based Morgan, Lewis & Bockius.
And there are indications that more team-ups are likely in the near future. “I do expect that the number of collaborations between foreign and local firms to increase in general as the Singapore market opens more and more,” said Philip Fong, HEP’s managing partner, who will take the helm of EHE starting May.
“Based on enquiries we have been getting, I imagine there is quite a lot of activity in law firm mergers,” noted Stefanie Yuen Thio, joint managing director of TSMP Law Corporation. “Singapore is still seen as a key hub for Asia, especially as China is leading the charge for globalisation. Its One Belt, One Road policy and the increasingly closed and protectionist mindset of its Western peers will bode well for Singapore as a legal hub.”
The reasons behind this are numerous. One motivation, according to Fong, is the growing competition in the Singapore market. “Local firms will not want to be marginalised as more international firms enter the local arena and compete for work,” he said. “Local firms will want to increase their standing to garner more work while international firms will want to cooperate with local firms for jobs involving Singapore law. These ‘wants’ create the intuitive need to collaborate.”
For Azmul Haque, managing director of the recently established boutique Collyer Law, attracting the best talent is an issue facing Singapore law firms. “We peg associate pay against the top six Singapore law firms, but it’s still hard to attract talent, especially at the 4-6 year PQE level,” he said. “Many talented lawyers at that level prefer the more international platform that an ‘alliance firm’ may provide – at least in theory – because that may mean more interesting cross-border work, opportunities to travel and undertake secondments overseas, and generally sample a more internationally diverse cultural environment.”
PERFECT MATCH
While lawyers agree that more tie-ups are on the horizon, the way the association is set up, as well as firms’ approach to it are expected to vary widely. “The mode of collaboration will depend on the peculiarities of the parties,” said Fong. “Some local firms, big or small, value independence above everything and would not dream of merging. Some foreign firms are risk-averse or are not interested in investing money or assets and be a minority partner in a local firm. Some foreign firms may only be interested in specific or limited practice areas in Singapore law, and this will limit the number of genuine choices available. Hence, whether there will indeed be more JLVs or mergers… will ultimately depend on the foreign and local firms finding the ‘right’ counterpart.”
Haque explained that collaborations will occur only where there are clear synergies seen by both Singapore law firms and foreign law firms. “Of late, whether an international law firm seeks a local alliance in Singapore depends much on its global ambition and strategy, including for Asia, and whether Asia presents a significant opportunity for new revenues, or whether it is merely a ‘defensive play’ to counter leakage of work to other global competitors who do have an office,” he said.
Tie-ups – for the time being, anyway – will not involve Singapore’s largest firms. “The likelihood of tie-ups with the Big Four Singapore firms is unlikely now, given most have tasted some form of collaboration in the early years of Singapore’s legal market liberalisation,” said Haque.
He continued: “For many, these alliances did not turn out quite as expected, as it was tough to match and manage expectations. In Asia, legal matters are often referred based on personal relationships, and managing lawyers in that respect is generally like ‘herding cats’, so even an exclusive association doesn’t guarantee an exclusive flow of work. For larger Singapore firms that currently receive referrals from multiple foreign law firms, they may be concerned over potentially losing business because of the mandate that they officially join into a relationship with just one foreign firm.”
Fong also noted that medium-sized firms would tend to be “the right size for mergers, as the investment injection by foreign firms in the event of a merger tends to be less prohibitive.” Yuen Thio agreed: “It has always been easier to do the mid-tier firm merger as smaller-sized firms are easier to digest. This is even truer now when firms in Europe and London are suffering from the fall in the Euro and the fallout from Brexit.”
For Haque, however, more than mid-tier firms, there may be more “hand-picked boutique firms” that will align themselves with international partners.
To contact the writer, please email [email protected]. |
| SyCip’s new managing partner: ‘We need to leave a collective legacy’
Hector M. de Leon, Jr. was recently named as the new managing partner of SyCip Salazar Hernandez & Gatmaitan, one of the Philippines’ largest law firms. He spoke to Raj Gunashekar about his strategy for the firm going forward, overcoming external challenges, and what makes a good law firm leader.
ALB: Congratulations on your new role. How have the initial few months been so far?
de Leon, Jr.: Great! I am thankful for the support given by my partners and the other members of the SyCip community.
ALB: What are your top priorities as the managing partner of SyCip, particularly for the first year or so?
de Leon, Jr.: As in many other law firms, growing the firm's revenues remains a top priority. However, there are other things we should focus on.
I am a firm believer in good governance, which helps organisations mitigate risks and operate more efficiently. Further strengthening the firm’s system of governance will be a definite focus point.
The greatest asset of the firm is our people. In this regard, I intend to pay particular attention to the retention of talent.
Finally, several key partners are due to retire this year and in the next several years. The firm needs to ensure proper succession into the partnership, practice areas and key positions.
ALB: Even though SyCip has an established brand in the Philippines, the local market is fast evolving, and competition is heating up. What is your strategy to ensure the firm continues to remain successful and in the top tier?
de Leon, Jr.: SyCip is at the forefront of legal practice in the Philippines. For example, we handled the first build-operate- transfer (BOT) project in the Philippines and the first financial or technical assistance agreement executed by the Philippine government.
To stay ahead of the competition, we should remain [on the] cutting edge. I am confident that with [our] wealth of talent, coupled with the SyCip work ethic, we will remain a cutting-edge firm. The firm will continue to encourage specialisation and the development of new practice areas. We will continue to hire the best talent from the best law schools in the country. The firm will also provide the necessary support system that enables our lawyers to practice law in the best manner.
ALB: Where do you see challenges to the firm in the next few years? How would you look to overcome them?
de Leon, Jr.: I believe that the firm’s major challenges in the next few years will relate to policy shifts and similar developments in the local and global economic and political environment. Non-Philippine clients constitute a significant portion of our clientele. A reduction in the amount of foreign investments in the Philippines may affect the firm.
While the Philippine economy is expected to grow in the next several years, the Philippine government must foster an environment that is conducive to business, both local and foreign. This is particularly important given increased sentiment in other countries to have an inward focus insofar as business and investments are concerned.
These challenges are external in nature and dependent on matters beyond our control. Accordingly, we should concentrate on the things that we can control as members of the SyCip community, such as doing our work well and providing our clients with the best service. This is the formula that has sustained the firm despite the political upheavals and severe economic difficulties in the past.
ALB: What in your opinion makes a successful managing partner?
de Leon, Jr.: In Harvard Business Review's “10 Must Reads on Leadership”, psychologist Daniel Goleman writes that the most effective leaders have a high degree of emotional intelligence.
Goleman breaks down emotional intelligence into five components: self-awareness, self-regulation, motivation, empathy and social skill. I agree with Goleman. Managing partners must be aware, among other things, of their emotions, strengths and weaknesses. They must be able to control or redirect their disruptive emotions and impulses [as well as] pursue goals with energy and persistence. They must be able to understand other people's emotional make-up and manage relationships in order to move people in the desired direction.
Based on research, emotional intelligence can be learned and improved. I will certainly strive to increase [mine].
ALB: Under your management, where is the firm headed in the next couple of years?
de Leon, Jr.: In 2045, SyCip will celebrate its 100th anniversary. During our partners' meeting in November last year, I asked my partners this question: How are we going to be remembered in 2045, when the firm celebrates its centennial?
We will not be remembered for simply continuing the excellent work that we do or for building on the success and accomplishments of the firm. That is expected. We need to leave a collective legacy that will make future generations of SyCip partners and lawyers grateful for the things that we started and grateful for the things we have accomplished.
As a managing partner, I intend to lead that journey in achieving our collective legacy. In the next couple of years, the firm will lay the groundwork for the collective legacy we hope to put in place by the centennial.
To contact the writer, please email [email protected]. |
| Morgan Lewis sets up Hong Kong basecamp for China ascent
After scooping up 13 partners in Greater China from Orrick, Herrington & Sutcliffe, Morgan, Lewis & Bockius has big plans for the Middle Kingdom, finds Raj Gunashekar
In 2014, it was Japan where Morgan, Lewis & Bockius took on board ten lawyers from Bingham McCutchen. In 2015, it was Singapore where the Philadelphia-headquartered law firm entered into a first-of-its kind merger with local outfit Stamford Law Corporation.
And 2016-17 has been the year for expansion in China. Last year, Morgan Lewis opened a new office in Shanghai after landing more than 25 lawyers from Dentons in that city and Beijing. Last month, it nabbed a total of 13 partners from Orrick, Herrington & Sutcliffe – part of a team of 40 lawyers – and also announced plans for a Hong Kong office. The new additions take Morgan Lewis’ headcount in China and Hong Kong to more than 70.
The 13-partner team leaving Orrick included Edwin Luk, formerly the global head of the capital markets group, and Maurice Hoo, global practice group co-leader of the M&A and PE practice group. They have set up a Hong Kong local law firm called Luk & Partners, with which Morgan Lewis is set to enter into an association as it plans its office in that city.
With this team in place, Morgan Lewis believes that it is ready to fulfil its big ambitions for the China market. “We have been looking for just the right team in Hong Kong. Edwin Luk, Maurice Hoo, and their elite team compete at the highest level in the Hong Kong and China markets, and they represent many of our key clients and other leading companies in Asia,” said Jami McKeon, the firm’s chair.
She added: “Chinese business enterprises are increasingly focused on cross-border investments, and our teams in China, Hong Kong, Singapore, and Tokyo are poised to work with our lawyers across the United States, and in Europe and the Middle East. Morgan Lewis’s expansion in China is a natural outgrowth of our focus on the global economy.”
Morgan Lewis aims to represent Chinese state-owned and private enterprises in cross-border transactions, including capital markets, acquisitions, divestitures and finance, as well as provide transactional, finance, compliance and regulatory advice to multinational companies doing business in China.
“We will expand in other key areas,” shared McKeon, “such as fund formation, FCPA and corporate compliance, IP, workforce mobility, and finance over the next several years.”
The firm also intends to continue its growth in Asia, said McKeon. Apart from its offices in China, Japan and Singapore, Morgan Lewis has offices in the cities of Almaty and Astana in Kazakhstan.
To contact the writer, please email [email protected]. |
| ALB Hot Startups: Legalese
ALB Hot Startups is a weekly series that looks at the most promising new legal tech companies in Asia. This week, we train the spotlight on Legalese, which offers contract-drafting software. By Raj Gunashekar
Firm name: Legalese
Year of founding: 2015
Located: Headquartered in Singapore, it also has team members the U.S., the UK, India, Canada and Thailand.
Founders: Computer scientist Wong Meng Weng, "recovering lawyer" Alexis Natalie Chun, and startup domain expert Ong Chiahli.
What they do: Legalese is an open-source software company aiming to “eventually replace contract-drafting lawyers with contract-drafting software.”
Target market: For now, startups raising their first funds and in need of fundraising documentation.
“By some estimates, 70 percent of people who need a lawyer don’t hire one. So at the start, we’re neither competing with lawyers nor those willing to pay for one. We’re targeting users who cannot afford to hire a lawyer and thus are tempted to do-it-yourself,” one of the founders says.
Capital raised till date: Legalese has received two grants over the last year: an $8,800 String Labs Grant and a $23,000 ISIF Technical Innovation Grant. “As we were oversubscribed for our angel round, we had to split it into two tranches,” Legalese says.
Impact till date: Since it started, Legalese claims to have helped a number of startups in Singapore raise over $1 million through the first version of its concierge MVP document assembly prototype.
How the idea came about: Prior to Legalese, founders Wong and Ong were at JFDI Asia, Singapore’s first startup accelerator, where they were directly involved in helping startups with fundraising documentation, execution and advice.
Trudging through the complexities, and time-and-labour consuming preparation and execution of legal contracts and documentation, they realised that lawyers use computers to help them with the typing, but not with the thinking.
“White-collar automation is transforming many industries, and law is no exception. The history of legal informatics goes back 30 years, mostly in the academic sphere. Over the last 50 years, software engineers have developed hundreds of tools across a dozen genres, all aimed at improving productivity. By contrast, the legal industry has only two tools: Microsoft Word’s track changes, and the email attachment. But what if a programming language could be designed to express contracts as programs?” asks Chun. “What if technically sophisticated end-users could customise their contracts not by editing human-readable text in MS Word, but by editing high-level expressions then hitting ‘compile’? What if formal methods could be used to model-check and verify such contracts for completeness and consistency?”
The journey so far: Legalese’s immediate plans are two-pronged. “On the product side, we’re building Version 2 to have a more user-friendly interface, with built-in education, document dependency management, and API-integration with state registers that record companies’ information. On the research front, we are inventing L4 [the non-proprietary domain-specific language optimised for expressing legal semantics],” reveals Chun.
The research branch will, at some point, dovetail into the product branch, with Legalese building web applications (for example, fundraising documents, sale and purchase deals, service and agreements) that commercialises L4.
As Legalese scales up, it plans to expand the product workflow range laterally to cover different industries and their sector-specific documentation, and vertically to cover the documentation that comes in at different junctures of a company’s life cycle.
To contact the writer, please email [email protected]. |
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