The last and largest roundtable discussion for the Insider Guide to Legal in Singapore event was held at the Supreme Court.
Jointly put together by Asia Law Network, the Law Society of Singapore, the Singapore Corporate Counsel Association and our Australian partners, AlphaCreates and ASEAN Legal Tech Association, co-hosted the two day event. The event had lawyers from Australia, Vietnam and Singapore getting together for visits to various companies and having a series of roundtable discussions on pressing legal trends.
Speakers for this roundtable include:
Yingyu Wang, Director, Taylor Vinters Via LLC
Shashi Nathan, Partner, Withers Khattarwong
Suresh Nair, Managing Director, Nair & Co LLC
Pratap Kishan, Director, Kishan Law LLC
Tan Choon Leng, Head of Corporate, JurisAsia LLC
Darius Tay, Director, BlackOak LLC
Dharmendra Yadav, Vice-President, SCCA (Moderator)
The topic for this roundtable is “Mergers of Local and International Firms: Challenges Faced and Opportunities Presented.”
“Be sure that your new partner will be able to add value, be ready to do your due diligence and be armed with realistic expectations.”
The sentiments are similar across the board – look before you leap. Most panelists spoke of the ‘synergy’ that has to be present before any merger or alliance can be possible.
This ‘synergy’ comprises many things, though not necessarily just the international law firm’s profitability or nature of the firm. But rather, ‘synergy’ is the common goal both firms share, the right blend of people, the culture and practice areas. Out of which, at the very least, there should be strong commitment in moving towards a common end goal. A difference in culture because of the origins of both firms could make all the difference.
“It is similar to being married, the key is to find a marriage that still allows you to date.”
Some cautioned against going in to a merger too quickly, and suggest loosely working together with the international firms first before deciding whether or not to go ahead with working together, or if the firm is the right fit.
Other panelists have commented that one should have realistic expectations when entering a merger that there will be teething issues initially, and not to expect profits right away. A typical waiting period for a merger to be finalised could be anywhere between 6 months to a year for the smaller law firms, up to even two years for the larger ones. The regulatory aspect of a merger alone could take up to 9 months to complete.
It is paramount to be prudent and take all the time required to assess, complete due diligence and cross the hurdles, whether culturally or regulatory, prior to a merger.
The advantages of a merger would include being a ‘whole package’ rather than focusing only locally when cases sometimes tend to be cross border in nature. Increasingly, international firms have moved to set up shop in Singapore and merging with local firms to overcome the cultural and regulatory aspect of the industry. This can be advantageous for both sides of the plate.
This ‘whole package’ could be more enticing to clients, seeing the increase in multi disciplinary practices lately. It cannot be said for sure whether being multi disciplinary is the right way to go, but one thing that can be said for certain – law firms have gotten to a point where they cannot sit back and let the tides push them but rather be in control of the disruptions.
It is however, not a one size fits all – a merger at this point for law firms might not be the best way forward. It is dependent on the client base, potential synergies with the international law firm and in the specific situation the law firm is in, the decision has to be made pertaining to the situation rather than trends in the industry.
There are other challenges faced besides the initial teething concerns, and that would be the worry that if a law firm decides to merge with an offshore firm, the law firm will lose all its business from all other offshore firms. A different perspective of this situation would be other factors coming into play, including relationships with clients and intermediaries. Also, having the common synergies with the potential international law firm could ensure client retention.
The common goal between two parties is subject to change as time passes. It is often that law firms dissolve their mergers because of how different perspectives are formed of the same common goal. The merger which seemed attractive initially then becomes difficult when rubber meets the road. The initial freedom that the law firm has before the merger would also change and possibly be more restrictive. And while mergers in the market seem to be competition driven, the panelists beg to differ. Several remarked that their mergers were client driven rather than competition driven – to add value for their clients.
Ultimately, a merger entails that there will always be constant change and adjustment to an evolving relationship to move forward. Look closely and clearly before committing and know the value add your potential international firm is bringing to the table. Identify common client base and seek to be comfortable with the potential international firm. It is entirely sound to take all the time required to determine the suitability of the merger. It is also entirely wise to not merge if the situation does not call for it. Understand that a common goal can take on many perspectives, so be sure of what is interpreted and agreed upon.
“Look for the same DNA that your potential international law firm, the right blend of people is paramount – always keep an open mind.”
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.