ANALYSIS: The North Face

Three top tier firms announce new Asia offices. Norton Rose is welcomed into Australia with open arms by Deacons. Allen & Overy arrives via the back door. Rumours persist that Linklaters and Clifford Chance are sniffing around the Australian market. One top tier firm is apparently so concerned about the possibility of a raid that it has been holding a series of crisis meetings aimed at anticipating and preventing a Clutz-style exodus. Is all this a coincidence, or symptomatic of the same pervasive trend?

The common theme here is the lucrative potential of the Asia market. Australian firms are looking north and international firms, in turn, are looking to Australia at least in part as a means of resourcing an Asia assault. However, while there is evidence to conclude that there is a collective dash to capitalise on Asia, this analysis is tempered somewhat by a look at the individual circumstances of each venture. ALB has previously noted that the expansion of Allen & Overy into Australia was as much a product of the unique circumstances within Clayton Utz as it was a testament to the attractiveness of the Asia-Pacific.

Clayton Utz itself is an interesting case study. Despite protestations that the expansion into Hong Kong is a "natural progression" of the work the firm has already done in Asia - and to be fair, the firm has built some good relationships in the region - we are yet to see any convincing explanation as to why, after 20 years of relationships-based strategy, the firm has suddenly decided to hang out the shingle in Hong Kong. The irresistible inference is that Clutz came to the conclusion that its previous strategy was wrong and that a physical presence was preferable to an offshore relationship-based presence. In last month's managing partner profile, CEP David Fagan denied that such an epiphany had taken place.

The mysteries of Clayton Utz aside, now is the time for firms to take a close look at their Asia credentials. Such an analysis may or may not result in a change of policy. It is worth noting that some of the new ventures - particularly Blake Dawson's foray into Tokyo - have attracted some scepticism about exactly what is to be gained from pushing further into a market which is already well served by Australians. In the end, the matter comes down to a reprisal of that familiar debate about what a physical presence in a given jurisdiction adds to any given relationship.

Lining up to plead the case in the negative will be Freehills, Gilbert + Tobin and Corrs, all of whom are persisting with a relationship-based or "fly in, fly out" model. Corrs partner Anthony Latimer told ALB that physical presence made little difference, as long as Australian based staff make themselves available and mobile. "Not being across the road means we cannot be at their office in half an hour, but we can hop on a flight and be there in eight hours." Corrs has six partners across its Melbourne, Sydney, Perth and Brisbane offices dedicated to China related work. Latimer says that his firm's offering in Asia is on par with that of firms which have a physical presence there, aided by the use of a combination of modern technology, strong language skills in Australia and senior partners who have spent most of their lives in China. At the other end of the scale, Mallesons has 125 fee earners in Asia and would scoff at the suggestion that a physical presence was irrelevant. As certain individuals within Mallesons are fond of reminding us, it is the size of the footprint that counts, not necessarily the number of offices or shop-fronts a firm can claim to its name.

In the end, it may be the case that there is room for more than one Asia-Australia model. Now, however, is the time for firms to review their strategy and to stake their claim on the lucrative opportunities to the north.