The biggest and most profitable City law firms have always distinguished themselves from their smaller competitors by their large networks of overseas offices. Clifford Chance, the largest firm in the world, has 32 outposts in 28 different countries, while Norton Rose, the City law firm with one of the most extensive networks, boasts 43. Popular locations include European financial centres, such as Paris and Frankfurt, and booming Asian hubs, particularly Hong Kong, Singapore and Shanghai.
Around the world
Despite the uncertain economic climate, City law firms opened a clutch of new overseas offices in 2011. Amid turbulence in the eurozone, a number of big players in the market nevertheless saw potential for increased business in Europe. Norton Rose and Eversheds moved into Hamburg, while Ince & Co and Olswang opened for business in Paris.
Many new openings, however, seemed to reflect the greater potential for economic growth outside Europe. Magic circle firms Allen & Overy and Clifford Chance set up offices in Istanbul to capitalise on the booming Turkish market. These two large firms, along with competitor Norton Rose, also opened offices in Casablanca, as Morocco positions itself as a bridge between African economies and European investors. Business has been good in resource-rich Australia over the past few years as its mining and energy companies have been kept busy supplying Chinese manufacturers, and law firms have been keen to take advantage. Allen & Overy and Clifford Chance already have offices in the country, and Clyde & Co and Herbert Smith have recently announced their interest in acquiring a base here. But perhaps the most adventurous of the 2011 openings is Evershed's decision to launch in Iraq - in June last year, the firm put its name to a new branch in Baghdad, in partnership with an existing Iraqi firm. Closer to home, Allen & Overy and Herbert Smith both recently opened offices in Belfast.
Why do City law firms need these overseas offices? They often act for large UK-based companies and financial institutions that have subsidiaries, customers or business partners in foreign countries, and need to have lawyers in the firm who can advise these clients on how local law will affect their business affairs. In addition, City law firms, like their New York -headquartered equivalents, attract clients from all over the world because of London's position as one of the world's leading centres for business and finance. Many of these clients will be looking for advice on English law as it governs many multinational commercial dealings, but having lawyers in the firm who can advise on the law of a client's home jurisdiction is also very useful. Finally, having a large overseas network brings the firm prestige in the eyes of clients, competitors and potential recruits - in particular, being one of the first to open in a new city brings plenty of valuable good publicity as well as new sources of revenue.
The hunt for new territories to move into looks set to continue in 2012. An office in South Korea is thought to be on the shopping list of many a Square Mile managing partner. The North East Asian country, home to corporate giants including electronics manufacturer Samsung and carmaker Hyundai, is full of business potential, but until recently prohibited foreign firms from opening offices there. The recent lifting of this restriction for both EU and US firms is likely to lead to a flood of Seoul launches over the coming year.
An office in India, another major Asian economy with enormous potential for growth, would be a jewel in the crown of any City firm's Asian offering. Currently, non-Indian lawyers are not allowed to open offices in the country, but many City firms run India-focused practices from elsewhere in Asia or in London. It's thought that India may relax the law in this area in the next few years, and City law firms have been involved in lobbying the Indian government to bring this change about in the interests of encouraging Indian economic growth.
But not all elite law firms choose to grow a large international web of their own offices. Slaughter and May, one of the City's most highly-regarded law firms, has just three outposts abroad - in Brussels, a crucial centre for EU work, and in Beijing and Hong Kong, reflecting the growing significance of China in the global business world. In other jurisdictions Slaughters has "best friend" relationships with top local firms. And Slaughter and May is not alone in taking this minimalist approach. Wachtell, Lipton, Rosen & Katz, the world's most profitable large law firm and, arguably, the most prestigious corporate practice in Manhattan, has no offices outside its New York base. When it comes to law firms, it would appear that one size does not fit all.