Almost five years on from the collapse of Coudert Brothers, Orrick’s Christopher Stephens explains to ALB why he still calls on his change management experience to drive the firm’s expansion in Asia and manage the financial crisis.
Few lawyers in the Asia-Pacific region have had a career as diverse as Orrick’s Christopher Stephens. In addition to stints working for Cravath on the massive IBM antritrust case and the Pentagon he has also lived through many a lawyer’s worst nightmare – the mega-law firm collapse. As Coudert Brothers wound up its 31-office global operations in mid-2005, after 153 years in business, Stephens (then a partner with Coudert) was charged with the task of ensuring its 37-year old Asia practice found a new home with a compatible international firm operating in the region.
Moving en masse
Coudert was the first international firm to open in Asia – in Hong Kong and Singapore in 1972 and in Beijing in 1979. “We wanted to maintain the reputation, stature and goodwill of the firm in Asia that had been built up through almost 35 years on the ground,” Stephens says. Add to this the fact that the firm’s winding up was increasingly constrained by an anxious group of banks, and had head-hunters circling its 120 soon-to-be displaced lawyers in the region and a number of clients expressing concerns about continuity of service, and it is apparent the task confronting Stephens would challenge even the most seasoned change management expert, let alone a lawyer.
The move was, of course, governed by the usual factors: compatible firm cultures, reputation, skillsets, and a commitment to Asia. But it was in one particular area that Stephens says Orrick really set themselves apart from other potential partners. “We were impressed by Orrick at the time because of its forward trajectory, one-firm vision and commitment to uniformity of excellence in the areas most relevant to the future of practising in Asia.”
What ensued was one of the largest, if not the largest, transitions of its kind seen in the region. Orrick inherited Coudert’s entire Hong Kong and Shanghai teams, as well as most of its Beijing office.
If the Orrick story up until 2005 is an interesting read, then what has transpired since – and what is on the cards for the future – is equally as captivating. “Our strategy was to combine the Coudert legacy with the global strengths and commitment of Orrick to create a leading firm in Asia.” Orrick’s global strengths are in finance and financial markets, investment and disputes practices, and its Asia strategy is designed to align with these areas. The firm has brought on board 70 lawyers since the transition, and Stephens says with further announcements of more growth in “areas of strategic importance to us locally and globally” are imminent.
However, it is the very real possibility of at least two more Orrick offices in Asia that Stephens is most noticeably enthused about. It won’t come as a surprise to learn that Korea is front of mind for Stephens, and with good reason. Orrick is considered among only a handful of international law firms with a well-rounded and established Korean practice. Stephens is keen to have a physical presence in the country, so it’s probably an even-money bet that the firm will enter Korea when, and if, the regulatory restrictions prohibiting entrance are relaxed. “I suspect we would be in Korea soon after we are permitted to be,” he says.
With FDI levels into Vietnam now reaching impressive heights, Stephens admits that a Hanoi or Ho Chi Minh City office is a possibility. “Foreign investment in Vietnam has increased significantly – especially from investors in China and elsewhere in the region,” he says. “We have a substantial deal flow coming out of Vietnam and we are managing that from here, albeit at capacity. We are looking at Vietnam right now, but this needs to be weighed against other opportunities across the world,” he concedes.
It seems the investment of capital and resources are not the factors that stand between the firm and an imminent Vietnam branch office. “Opening an office, whether it is in Seoul, Hanoi or Timbuktu, isn’t a light matter. You need to be certain of your vision and strategy for being there,” Stephens says. “If you get it wrong there is not only a high financial cost, but also a cost to your reputation as well.”
Managing through the crisis
Stephens believes fundamental changes are in store for Asia’s legal markets, and that the challenge for practitioners is devising strategies which recognise the changing way clients are consuming legal services. “The crisis was not just about cutting legal spending. For some clients, especially larger banks and multinational corporations, they need more legal services than before,” he says. “[They] have actually increased their legal spend in addition to showing more willingness to leverage their buying position. But the way they are consuming these [services] has changed, as has the way they are expecting us to deliver services.”
Innovation and adaptability are catchphrases of the times at Orrick.The old ways of doing things, while always having a place in the industry, will not be enough to get law firms through, Stephens believes, and it is something that will be felt most acutely by international law firms focussed on complex transactions and disputes work. “We’re are reexamining almost every facet of our business and challenging over 50 years of established industry doctrine, from different roles of lawyers in the firm to career development to client engagements and fee arrangements. And we’re realigning many of these to current and anticipated market realities,” Stephens explains.
But none of this signals retreat. The firm has climbed the league tables dramatically since 2005, and has recently won an impressive array of global client engagements ranging from Microsoft, Levi Strauss & Co. and Facebook to US and Asian government agencies. “It is clear that relationships, depth of talent and global reach are not as important as they once were. Law firms need to think strategically about client relationships; and be innovative, efficient and effective in how they organise their resources and engage with clients.”
The task confronting international law firms is clear: “Clients want to know that when they speak to a lawyer in the Hong Kong or Tokyo or mainland China offices, that they all have an understanding of the clients’ business and preferences for legal services,” Stephens says.
And there’s the recurrent theme of holding it all together. “When offices are so far away from the mothership these things take on a new importance … distance can exacerbate feelings of not being fully connected. Our practice group and client team model is supported, not led, by our geographic bases and knits together our people intra-regionally and globally. Leveraging knowledge management processes is important and information sharing is the key in this process. This will ensure that everyone is on the same page.”
The trick, says Stephens, lies in ensuring global connectedness while maintaining the local touch. “International firms have to maintain a balance between significant local depth and being part of [the] global firm which needs to be overlaid with global resources,” Stephens says. “Firms that open in Hong Kong, for example, will be challenged in the short term if they do so only with a view to advising on New York, US or UK law … though from the number of firms undergoing localisation processes at the moment, I think firms are realising that, to be sucesssful here, a full commitment to Asia has to be part of their long global strategy”