This article first appeared on August 22, 2017 in ALB Insights, a weekly, ad-free newsletter that is sent to subscribers. To purchase your subscription, please email Amantha Chia at firstname.lastname@example.org or call her at +65 6870 3917.
Even as economic conditions improve in Myanmar, the Southeast Asian country remains a difficult place to open an office, given the poor infrastructure and paucity of qualified talent. Raj Gunashekar speaks to international law firms about the challenges they faced in launching a Myanmar branch.
Regular visitors to Myanmar are frequently impressed by the rapid improvements taking place in the country, which endured minimal development during its decades of isolation.
However, while liberalisation has brought understandable benefits including a robust rate of economic growth, businesses looking to set up in one of Asia’s most exciting economies still face several challenges. These include a limited mobile network and poor infrastructure as well as the paucity of hotel spaces that meet international standards and the looming presence of financial and trade sanctions.
The situation is no different for international law firms. Take for example, Allen & Overy, which entered Myanmar in 2013.
“We had to import all the furniture, IT equipment and other things that you need for an office, including getting business cards printed offshore. We struggled – and indeed we still do – with poor internet connectivity and power outages,” says Simon Makinson, head of Myanmar practice, Allen & Overy.
But the biggest challenge was office space, as there were very few purpose-built office buildings in Yangon. The firm ended up opening an office at the Inya Lake Hotel.
“What shocked us was the cost,” says Makinson. “We had to pay prices higher than Mayfair for our small office.”
And there were substantial issues with mobile connectivity, and even sending emails. A SIM card for a local phone cost $1,000 and the firm was paying a fortune for internet connectivity.
“I think everyone was a bit frustrated, but having set up in several other developing markets, we all recognised that it would get better over time!” he adds.
Finding space has been easier for Stephenson Harwood, which will launch its own office in Yangon in September. The firm maintained an association with local law firm U Tin Yu & Associates between 2013 and 2016.
“As we now open our own office, we do so at Junction City – a mixed-use commercial joint venture between Myanmar conglomerate Shwe Taung and Singapore's Keppel Group,” says Tom Platts, who leads the firm’s Myanmar practice. “It could not be more different from the Yangon of just a few years ago.”
It was a similar experience for Dentons, which opened in Yangon last year. “The office space market in Yangon had softened a little, and there were plenty of choices,” says Mark Livingston, resident partner, and Janice Ngeow, director of Dentons Myanmar Ltd.
“The obvious choice would be either the mammoth Myanmar Plaza or the swanky new City Junction – both felt no different from the typical Singapore modern steel-and-glass complexes with a mall attached.”
The firm eventually opened in the refurbished Strand Square, a former government building located on the banks of the Yangon River.
Finding office space is one thing; peopling it with quality local staff is another. Law firms have not found it easy to hire the right staff in Yangon, either office support or in legal roles, as few had previous experience working for global law firms or even international companies.
“For historical and developmental reasons, most young professionals have had limited exposure to international business,” say Livingston and Ngeow. “ Some of the core practical skills that we might take for granted in other jurisdictions are therefore less prevalent in the local workforce at present.”
“Exacerbating this situation on the legal front, current practical legal training requirements are litigation-focused and don’t adequately address the commercial and transactional skills in demand for foreign investment work,” they explain.
Additionally, finding qualified English-speaking staff with the right skill-set for contemporary international business is probably the biggest challenge for just about all foreign businesses operating in Myanmar at present – not just in the legal profession, say Livingston and Ngeow.
Stephenson Harwood found it difficult as well. “It was a challenge to find an appropriate team of local legal personnel, with the ability to demonstrate the high standards expected of an international law firm, and to deliver a sophisticated and polished product to our domestic and global client base,” says Platts, who adds the recruitment process “took many months.”
The solution is using your network, and also banking on luck. “We struggled at the start, but we were very fortunate to be introduced to a very smart Burmese lady who had previously worked for NGOs in Myanmar and outside the country, who was able to use her network to find good, smart and reliable staff,” says Makinson. “It all comes down to having the right network and even today it can be challenging to find the right people and particularly those with relevant experience.”
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