Magic circle firm
Freshfields Bruckhaus Deringer has declared (again) that it will not be opening an Australian outpost during the course of its wider Asian expansion drive.
Back in 2010 Freshfields told the market that it had no immediate plans for an Australian expansion. But by late 2012, spurred by a stampede of its rivals, it had hired a headhunter and sent a delegation down under to look for suitable tie-ups.
"With regards to Australia, there's been a great rush into it. It's a very well lawyered market, and clients are very well serviced by international firms and strong domestic firms," Freshfields’ regional managing partner Rob Ashworth said.
A leading industry consultant has told
Australasian Lawyer that it is unclear whether the firm was unable to find a suitable firm and enough recruits to enter into a partnership with, or whether it simply left its entry into the Australian market too late.
The source said that even though there would always be room for innovation and differentiation in mature legal markets like Australia, it is still very tough if a firm is just entering the market to replicate its competitors.
"Whilst a minority of firms might simply fall for the lemming principle, most will decide whether having an Australian base benefits their future client base or not. Some will be successful at this and for others it will go horribly wrong," the source said.
Instead of targeting precise aspects of the Australian legal market, international firms typically open offices in Australia as a part of broader brand enhancement and diversification goals.
The firm says that instead of opening up offices in Australia (Sydney and Perth were potential locations) it will continue to work with local firms and service its clients through an onshore/offshore capability. Its website currently promotes its ‘Australian team’ of partners in London, Cologne and Tokyo.
The decision not to enter Australia will ultimately benefit the Australian firms that are already in relationships with Freshfields as a part of the firm’s local network.
Freshfields has said it will focus on increasing its Asian revenues instead and is looking to expand its specialist practice areas and increase work out of Singapore.
The firm has also said it will not be opening offices in the newly opened South Korean market, saying that it will serve the country from its Hong Kong base instead.
Left on the Shelf — the timeline that lead to Freshfields being the only Magic Circle firm without an Australian presence or ‘special’ relationship
November 2006
DLA Piper forms an alliance with Phillips Fox to become DLA Phillips Fox
Throughout 2008
Clifford Chance and Mallesons spark numerous “will they, won’t they” discussions until the global recession forces firms to delay global domination plans
January 2010
Norton Rose merges with Deacons to become Norton Rose Australia
February 2010
Allen & Overy nabs 14 partners in a raid on
Clayton Utz.
Freshfields joint senior partner Konstantin Mettenheimer tells reporters it was “difficult to position Australia as a gateway to Asia due to the distance and differing timezones”
A
Linklaters partner tells the UK legal newspaper The Lawyer that low levels of profitability and the short supply of local lawyers would prevent the firm from emulating A&O. “It’s a good opportunistic move for A&O, but you’ll not see
Linklaters following suit,” said the partner. ”Australia’s very well-served by lots of very strong local firms. It’s not going to move the needle for A&O’s profit.”
May 2011
Clifford Chance merges with boutique firms Chang, Pistilli and Simmons in Sydney and Perth based Cochrane Lishman Carson Luscombe
DLA Piper merges with DLA Phillips Fox
March 2012
Blake Dawson rebrands as
Ashurst in its JV with the UK firm
May 2012
Linklaters forms an alliance with
Allens, forcing Slaughter & May to look elsewhere for a BFF
June 2012
Herbert Smith merges with Freehills
July 2012
Having learned from previous experience that having just one best friend can cause problems, Slaughter & May announces its ‘favoured partners’ in Australia are Clutz, Corrs, G+T and Minter Ellison
June 2013
Herbert Smith Freehills claims title of biggest international firm in the region, taking the number 1 spot from Baker & McKenzie
October 2012
Clyde & Co hires a team from Allens to launch its Sydney and Perth offices.
A Freshfields spokesperson tells Legalweek “We have no current plans to open an office in Australia. We do a lot of work with Australian companies and often have partners down in Australia helping clients and building relationships with the strong independent local firms.”
Clayton Utz sends its summer clerks to Freshfields offices in London and NY
February 2013
Hearsay reports that “Freshfields Bruckhaus Deringer", an English firm with no interest in opening in Australia, has been visiting in recent weeks to determine how it might open in Australia.
