PwC International Study Presents Strategic Intelligence On Globalization of Law Firms
NEW YORK, March 25 LAWFUEL – Law Firm Newswire — U.S. and U.K. law firms have made significant investments in China and project more than 10 percent profit growth there in 2008, according to the first-ever global strategic survey conducted by the Law Firm Services Group of PricewaterhouseCoopers’ Private Company Services practice
The rising economic tide in Asia, Middle East, Russia, as well as business activities in European countries such as France and Germany, will affect how law firms expand, the International Strategic Survey also found. The survey addresses key issues major global law firms face when dealing with globalization, the new cornerstone strategy of most large law firms.
The survey identifies the strategic thinking that law firm management teams use in making decisions concerning their foreign offices, and measures the financial and human resource results of those strategic decisions.
Other highlights include:
— During the last five years, the percentage of revenue generated by
U.K. firms outside of their home country was three times greater then
U.S. firms, while profits for U.K. firms were almost four times
greater.
— U.K. firms continued expansion into the U.S. market and anticipate
significant growth in profits in the U.S., particularly in litigation.
— Availability of laterals is the most important element considered by
U.S. and U.K. firms when deciding where to open a new foreign office;
U.S. firms are more dependent on laterals to generate business than
their UK counterparts.
— Foreign office profits increase through the use of cross-selling,
productivity, client expansion, work referrals from other offices, and
leveraging of global resources.
— Firms reported that their risk management and processes are embedded
in their cultures and are managed on a global scale. However, less
than 25 percent of all firms have formal, periodic evaluations of
their risk profiles.
— Examining the top practice specialties by revenue and profits, U.K.
firms now identify litigation in their top three profit generators but
not one of their top three revenue producers. U.S. firms now list
intellectual property as one of their top three profit generators but
not one of their top three revenue producers. These findings suggest
more emphasis in the future on intellectual property by U.S. firms and
on litigation by U.K. firms.
Participants in the survey included leading law firms in the United States, United Kingdom, Europe and Asia. “We were delighted by the high caliber of participation and the global reach of our survey,” said David Gaulin, co-chair of the Law Firm Service Group. “The survey results provide an interesting view into a myriad of firm activities including risk management. Surprisingly, firms seem to have a more general awareness of risk than clearly defined policies and procedures. Less than 25 percent of all firms have formal, periodic evaluations of their risk profiles,” Gaulin commented.
Co-chair, Stanley Kolodziejczak added, “As we move into year-two of the survey, we expect to see a number of emerging trends including increased profitability of U.S. firms’ foreign offices as they mature, a more in-depth focus on firms opening in China and additional focus on human resource initiatives relating to lateral attorneys and retention issues. In our 2008 International Strategic Law Firm Survey, we will be able to measure firm progress in these and other important areas that will help international firms manage expansion of their practices.”
PricewaterhouseCoopers’ Private Company Services practice in an integrated team of audit, tax and advisory professionals who focus on the unique needs of private companies and their owners. Within the practice, our professionals concentrate on the needs of law firms, manufacturing, retail, wholesale and distribution, construction, and food and beverage companies, as well as the needs of other professional service organizations. They are committed to delivering cost-effective, practical solutions and proactive services with the quality, clients expect from PricewaterhouseCoopers.
For more information about PricewaterhouseCoopers’ Law Firms Services practice, visit www.pwc.com/lawfirmservices.
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