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Relying on the ‘Stones of Other Mountains’: Enlightenment from the Development of Foreign Lawyers

Many law firms in Europe and the United States have a long history, dating back hundreds of years. In the long process of large-scale legal industry, although there is no lack of "barbaric growth" stage, but more of the industry's own accumulation. Examining the global layout status and development history of large European and American law firms will undoubtedly have important implications for our country's legal industry to take a large-scale path.

It can be seen from the above data that there is only one lawyer in 2,706 people on average in our country, while there is one lawyer in 250 people in the United States. The data in other countries such as the United Kingdom and Germany are also far lower than in our country, and the gap in the number of law firms more pronounced. It can be seen that despite the development of more than 30 years, our country's lawyer industry has made great progress in terms of number and service quality, but there is still a large gap in the total number of law firms and lawyers, and the coverage of legal services is far from reaching degree of saturation. There is still much room for improvement in tapping the potential of the legal service market, and at the same time, relevant laws and regulations should be systematically innovated to meet the growing needs of the people for legal services.

Throughout the large-scale development of major multinational law firms in the world, the main features are as follows:

1.Most international law firms are established in the form of limited liability partnerships (LLPs) 

This form is similar to the special general partnership in our country, but in the form of LLP, the scope of responsibility for partners is smaller; the headquarters and branches of such law firms mostly adopt a multinational company-style integrated management model. Individual super-large international law firms are established in the form of Swiss Verein, with independent settlements between each branch, but sharing a brand.

2. The number of branch offices and multinational number of law firms are not necessarily positively correlated with their competitiveness

Among the top ten law firms by global revenue in 2021, the first-ranked law firm has a per capita income of US$1.772 million. The law firm is established in the form of a limited liability partnership and has 15 branches around the world; it is established in the form of Swiss Verein. An internationally renowned law firm has 93 branches worldwide, with a per capita income of US$784,000. Although the three Swiss-based law firms on the list have numerous offices around the world, their per capita income is significantly lower than that of the other limited liability partnership firms on the list, which have a relatively small number of offices. It can be seen that the number of branch offices and the number of transnational law firms are not necessarily positively correlated with their competitiveness. A law firm may have more international offices, but it does not mean that the lawyers of the law firm will have higher incomes, nor does it mean that the business capacity of the law firm is stronger. How to achieve "stronger" while "bigger", so as to surpass traditional strong firms, is still a global problem.

3. The development of very large law firms often involves more than one merger

This includes strong alliances with domestic law firms, as well as mergers and acquisitions with foreign law firms, involving the integration of different cultures, systems and management structures. It may take more than ten years from the initial contact and negotiation to the later completion of the running-in. The merger of large law firms especially tests the ability of managers to integrate resources, build culture, and eliminate differences.

It can be seen from the above situation that law firms can choose the way of scale according to their own characteristics, but it is difficult to achieve the improvement of service quality, revenue generation and the integration of branch resources overnight. No matter what development model is adopted, legal services are still the core products of the lawyer industry. Optimizing customer service and improving the quality of legal services are still the cornerstones of a firm's growth and strength. Blindly developing branches and blindly pursuing the number of people may result in backfires.

In Coclusion

The author believes that no matter how the development model of a law firm changes, it is inseparable from the advantages of the lawyer group's "prudence and discernment" and the high degree of compatibility of the traditional legal profession; like the doctor profession, lawyers should "do what they do and do what they don’t". This is also the reason why our clients trust our lawyers; the blind commercialization of individual law firms will damage the professional quality of lawyers, and the consequences will be borne by the entire industry. 

The solution to this, on the one hand, depends on the self-discipline of the industry, and on the other hand, the corresponding legislation should also keep up. At present, the legal industry in our country has completed the step from 0 to 1, and the current development stage is on the road from 1 to 100. At this time, it is necessary to provide regulation and guidance in the form of legislation to maintain the health and sustainability of the industry’s developing.