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创新时代 与法同行︱Innovation in Interesting Times

作者: Stephen Mulrenan           编辑:YTL

While the top independent firms in the Asia-Pacific region maintained steady growth in 2017, many sought first-mover advantage in innovation.


In the context of the recent escalation of trade tensions between the US and China, the old Chinese proverb `May you live in interesting times' seems an apt description of developments in 2018. But while tension may bring about some uncertainties, the vast majority of legal market analysts remain highly optimistic about growth prospects for the Asia-Pacific region. 



According to the World Bank, GDP growth across the Asia-Pacific is expected to exceed 6 percent this year powered mostly by the region's big three economies of China, Japan and India. While this rate of growth is predicted to slow over the next three years in China and Japan—from 6.4 percent to 6.2 per cent, and from 1.3 percent to 0.5 percent, respectively—GDP in India will rise from 7.3 percent this year to 7.5 percent by 2020.



With the corresponding rise of the middle class right across the region, independent law firms are targeting growth in areas such as health services, education, food security and tourism. Another area of focus is work around the development of smart cities, including transportation, telecommunications and technology, Big Data and cyber security.



And there is an urgent need to find innovative solutions to the region's infrastructure development needs, which are predicted to exceed $22.6trn through 2030, or $1.5trn per year, to maintain current growth.



For example, many independent firms are hoping to see more opportunities arising from China's One Belt One Road initiative—a development strategy designed to bridge the infrastructure gap along the land and maritime trade routes connecting China with Africa, Asia and Europe—particularly as government-to-government co-operation between China and `host' countries escalates.


Home-grown Firms `Globalise on Their Own Terms'本土律所“全球化”

In connection with Belt and Road, a few Chinese firms have taken the initiative and launched some of the first legal service alliances with international member firms that are dominated by Chinese lawyers. This is perhaps an example of what King&Wood Mallesons ( KWM) described, in its submission for this year's. The Lawyer Asia-Pacific 100 report, as "home-grown Asian firms becoming more dominant and wanting to globalise on their own terms".



In the more mature legal jurisdictions of Australia and Singapore, some law firms are following this development closely.



Faced with clients who favour discounted hourly arrangements and/or capped agreements and who wish to move away from traditional relationship-based engagements, some firms have started investing significantly in systems and talent connected to emerging technologies. Believing that technology and the adoption of artificial intelligence(AI) and augmented reality (AR) will be a major source of disruption for firms in the future, they are attempting to avoid becoming archaic and therefore redundant in the eyes of their clients by establishing this clear point of differentiation from their rivals.


Inevitable Growth 必然增长

The Lawyer's sixth annual report on Asia-Pacific's largest 100 independent firms by lawyer numbers shows that the number of lawyers housed by these 100 firms increased by 15 percent last year, from 44,891 in 2016 to 51,599. This matches the 15 percent increase in numbers in 2016 from the 38,967 recorded a year earlier. And a review of headcount growth over five years shows that it is in the past two, in particular, that the recruitment drive has really escalated (total lawyer numbers have increased by 37 percent since 2013).



In that same period the partnerships of the largest 100 independent firms have grown by 49 percent. This includes last year's 15 percent rise in the total number of partners, from 12,676 to 14,579, which was double the pace of growth recorded in the previous two years.



While collectively the top 100 firms have become larger, this year's Asia-Pacific 100 data shows that not every firm has expanded its legal team. Although the majority (80) certainly did, 13 saw a decrease and sup stayed flat. While the number of firms reducing their headcount in 2017 was 13 fewer than a year before, nearly half of them were from Australia while an other two were from New Zealand, showing the challenges facing firms in highly competitive and low-growth legal services markets.



Unlike last year, when there were four new entrants to the list of top 100 firms, there was only one change of firm this year, further emphasising the robustness of these firms' business models. Chinese firm Anjie joins the list this year after Australian firm Henry Davis York merged with Norton Rose Fulbright, continuing a recent trend of mid-size firms in the country combining in some way with international firms.

去年有四个新进入者进入前100家律师事务所的名单,今年只有一个的变化,进一步强调了这些律师事务所的商业模式的稳健性。今年,在澳大利亚律师事务所Henry Davis York与Norton Rose Fulbright合并之后,中国律师事务所安杰加入了这一名单,延续了中国一些中型律师事务所与国际律师事务所结合的最新趋势。


Like last year, this year's top 100 firms come from 12 jurisdictions. China remains the most  represented country with 37 firms included. Australia comes second with 21 and India is third with 12.



Also like last year, Chinese firms performed most strongly in comparison with their counterparts in the region. Excluding the addition of Anjie, the combined number of lawyers in 2017 at the 36 Chinese firms that have consistently featured in the list over the past three years was 28,498. This represents an increase of 22.05 percent on 2016's figure of 23,352, which itself was 20.23 percent higher than the 19,423 recorded in 2015. This increase is much faster than the average growth rate of the Top 100 in 2017, which is 11.1 percent.



As a result, seven of the top 10 largest firms in this year's Asia-Pacific 100 ranking are from China. While this is two fewer than last year—one, if KWM's redesignation as a Hong Kong firm is not included—Chinese firms make up 13 of the top 20, the same as in 2016. The new entrant in the top 10 is South Korean firm Kim&Chang, which moves up one place to 10th.



Chinese firms also make up eight of the 10 fastest-growing firms in this year's ranking, with TianTai and DeHeng increasing their lawyer headcount by more than 50 percent. Beijing-based TianTai was the fastest-growing firm in the region in 2017 and rises 14 places in the rankings as a result. Its lawyer numbers increased by more than 57 percent from 368 in 2016 to 579 1ast year, while partner numbers rose by 64 percent from 151 to 248. While much of this growth can explained by its national expansion—it added six new offices—total revenue for 2017 was also impressive, rising by 26 percent to nearly RMB466m.



Meanwhile, DeHeng's phenomenal growth in 2017 sees this Beijing-headquartered firm regain the three Places it lost last year. Its qualified lawyer numbers increased by 54.9 percent, from 1,510 to 2,339, making it the second fastest-growing Asia-Pacific firm in 2017. In contrast to TianTai, DeHeng's recruitment drive bolstered the depth of resources at its current locations. However, it enjoyed an even more impressive hike in revenue of 33 percent to RMB2bn.




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