January 2, 2024 • 42 mins
Rob and Murray are joined by Gerard Tanja, founder of Venturis Consulting Group. Gerard is the EU's leading expert in global law firm mergers. Join us for a brisk and content rich discussion covering Gerard's unique approach to consulting with clients seeking cross border mergers. Hear about Gerard's thoughts on the next hot spots in Europe for global expansion and Rob shares his insights on why Hong Kong continues to be a location of choice for the largest firms in the world. We also discuss the impact of the A&O Sherman merger and its implications for competition across Europe's legal sector. (Hint: Buckle up.) And of course you do not want to miss the last chapter in "Bata's Best Bets" for 2024. Please contact Murray (murray@mcoffey.net) or Rob (rbata@warwickplace.com) with any thoughts, questions or ideas on who we can improve GMT.
Contact Rob and Murray:
Robert C. Bata, Founder and Principal, WarwickPlace Legal
Email: rbata@warwickplace.com
Murray M. Coffey, Founder and Principal, M Coffey
Email: murray@mcoffey.net
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Unknown (00:00):
Rob, welcome to GMT, the podcast for globally minded
(00:05):
law firm leaders with your host,Robert Bata, principal of
Warwick place legal and MurrayCoffey, principal of M Coffey,
between them, Rob and Murrayhave about three quarters of a
century's experience workingwith some of the most notable
law firms on the planet. Thispodcast is designed to help
those law firm leaders taskedwith growth make great decisions
(00:28):
about whether and how toimplement cross border expansion
for their firms and what ittakes to succeed. And now. Rob
Bata,
Rob Bata (00:42):
hello, everyone.
Welcome back to our latestedition of GMT, which I'm proud
to say with Murray that we'venow completed the whole year
we've had a number of what wethink were very interesting
podcasts, and so we considerourselves a minor success, and
we're looking forward to manymore interesting podcasts in
(01:05):
2024 today, we're very, veryhappy and pleased to have Gerard
Tania with us. Gerard, who's inaddition to being my good
friend, is the founder ofventuris Consulting Group. He
has been for the past 30 yearsor so advising international
(01:26):
legal organizations,multinationals, alternative
legal service providers and evengovernments on strategy and
market positioning. He'sexecuted very large number of
law firm and law firm mergers,strategic reviews, market
entries, complex change process,reviews and implementations.
(01:50):
Before founding, venturis Gerardwas also in charge of he had
global responsibility for postmerger integration at Clifford
chance and as well as partnerdevelopment and a number of
other significantresponsibilities. Earlier in his
career, he was legal advisor tothe Dutch Ministry of Foreign
(02:13):
Affairs. So he was a diplomat aswell as as well as a lawyer, and
we're just delighted to welcomehim. I should also say that my
consulting firm, workplacelegal, is in a an alliance with
Ventura, strategic alliance withventuris, and we are able,
(02:34):
together with our with our otheralliance partner, Kerma
partners, to essentially coverthe entire globe with our
consulting expertise, if I may,give us a little bit of plug.
Gerard, welcome. We're really,really delighted to have you
here. I see it so it's eveningtime in Amsterdam, where you are
(02:58):
based. I should mention thatventuris, although based in
Amsterdam, is also throughoutWestern Europe. You have, you
have a presence in Sweden,Germany and France. I may be
leaving out something you you docover the entire continent of
(03:18):
Europe with your consultingwork, and we're going to be very
interested in your insights. AndI think just just to kick things
off, I'd like to understand, andI think our viewers would really
like to our listeners, wouldlike to understand a little bit
of how you approach market entryfor law firms. What? What sort
(03:44):
of activity do you? Do youenvision? How does market entry
work when you're thinking abouta law firm merger or a cross
border entry into a new legalmarket.
Gerard Tanja (04:03):
Yeah, thanks Robert for having having me in
your in your podcast. Yeah, whenwe work on market entries or
merges, which are basicallysimilar type of processes, we we
basically look at what I wouldcall the five fits in our in our
(04:25):
work, when we start the process,the first one is always the what
I would say, the culture andambition fit. You have to ensure
that the partnership, the twofirms that want to merge, or,
you know, when one firms want toone firm wants to enter the
market, you know wants toachieve you have to to ensure
(04:46):
that your ways of working, yourfew on how the market will
develop, and you do need analigned understanding of the,
let's say the respectivedrivers, drivers of the. Merger
or market entry, that's always,always the first step, I would
say the first fit. And once youknow after such a discussion,
(05:09):
you're still friends and youlike and love each other, you
focus more on the client. Fitthe practice, fit the
performance. Fit performance inthe sense of the financial,
economic KPIs of the respectivefirms on the basis of what I
call the Rules Model, therealization, the utilization,
(05:30):
the leverage, the expenses, thesort of costing and the speed of
getting the money in, the profitsharing systems, costing
structures, etc. And last, butdefinitely not least important,
as you look at at at the peoplefit, how will the staffing, the
resourcing of new co how willthat, that look like? And are
(05:54):
the issues in the people arena?
Are they being addressed likesuccession planning? How does
the leverage models compare? Dowe achieve the breadth and the
depth in the respectivepractices that we feel are
really important? And I thinkthat, you know, those five fits
(06:18):
basically determine thepotential success of a market
entry and and and and or merger.
And I think what I see in mypractice in continental Europe
depending a little bit on thematurity of the respective
(06:41):
markets, and there aredifferences in continental
Europe between the respectivemarkets. I think this, this is a
reflection of the growingmaturity of, let's say, the more
advanced continental Europeanmarkets, because you know the
(07:02):
where to play, the how to play,and can we win? Question is
getting increasingly importantto determine your competitive
edge as market segmentationbecome more and more clear in
continental Europe, especiallyin the more advanced markets. So
I think this process or approachmethodology, whatever you want
(07:25):
to call it, is something that wereally focus, focus on during
our work with, with withnational, international clients.
Rob Bata (07:37):
You know, here are one of, one of the things that we
address in this podcast is alsothe interplay between the law
firm executive, the non lawyerprofessional, if you will, and
and the the actual the lawyermanagement. And I wonder if, if
(08:02):
you could talk a little bit, andI think, I think very well, have
more questions on this. Yeah, ifyou could talk a little bit
about when, when you look atthese five fits and and you
start the process, who are thepeople you're talking to?
Gerard Tanja (08:19):
That's, that's an interesting question, because,
again, it, I think it dependsvery much on the maturity of the
respective markets, and therebythe maturity of the respective
firms in the more mature firms.
I would think that, you know, wespeak in first instance, is
always with leadership andmanagement. Always, however, as
(08:42):
soon as the initial duediligence starts, what we see,
and we are currently engaged insuch a process, we see that non
lawyers are increasinglyinvolved in in in the due
diligence, and also in alreadyshaping the strategy and the
(09:05):
positioning of of new CO of thenew firm. And I think it is not
just the international firmsactive on the continent who are,
who are doing this, I also seethat the top tier, the leading
national independence ininvolved in such processes that
(09:27):
follow, increasingly, thosethose steps. So what we do see,
especially in HR, IT BDM, sobusiness development, marketing,
top notch non lawyers areinvolved from the beginning of
the process
Unknown (09:49):
and get hurt. You know, sorry,
Gerard Tanja (09:51):
sorry. Murray, one more. Please, please, if I
compare that to, let's say, 10years ago, Robert, that would
not have happened. And. Now ishappening, and I think it has to
do with the quality of the nonlawyers involved in in law firm
strategy discussions.
Unknown (10:11):
I agree with you. I'm a completely I too, have have
seen, you know, an increase inthe activity of people who come
from my side of the of theequation, getting involved
earlier and earlier Rob, Rob andI, that's how we got to know
each other, because I wasbrought in very early on a on a
on a possible merger. And it, itwas very helpful, I think, in in
(10:35):
in the immediate term and in thelong term, and figuring out how
to position question for you,and I want to go back. I love
this. The concept of the fivefits. It's great. It's just a
wonderful way, sort ofcontextualizing how an entity
can look at whether it's theright thing to do, whether that
(10:57):
whether the merger is the rightthing to do. And I was
especially impressed with yourfocus on culture as as being one
of the one of the very firstinitial considerations. I don't
think that's always that'salways the case with many
mergers. I think Rob and I haveseen mergers where culture was
(11:18):
ignored, and much to the perilof the of the of the merged,
emerged entities. And so whenyou're inquiring about culture,
what do you hear? What are the,what are the triggers that you
hear that say, okay, these are,this is a these are two entities
(11:40):
where we can figure out a way tomesh the cultures. I'm not gonna
say match or merge, say mesh,because it's not always a
perfect fit. We've talked aboutthis, you know, in the past,
with with some branding folksthat I know. But how do you
know? What do you hear? What'sthe what are your, you know,
indicia, if you will, of of a ofa of complimentary cultures.
Gerard Tanja (12:06):
Yeah, I think the first thing we usually do
because it, it, it's, it's veryimportant. I think because you
have to work, it's not acorporate you're dealing with.
It's, it's, it's, it's apartnership which is quite often
quite different. The first thingwe always try to establish is to
(12:30):
well, to figure out whether theambition and aspiration level of
the core partners in the corepractices of new CO are aligned.
And when I say ambitions, thatcan be professional ambitions,
it can be the type of work. Itcan be ambitions with respect to
(12:51):
clients, to financial, economicfactors, to the organizational
aspects of a potential merger,it can be everything. But that
is, I think, the first thing wetry to establish. So it's a very
methodology, maybe approach.
That's one thing. The otherthing, I think, we're focusing
on, and we use some someinstruments for that, and some
(13:12):
validated tools. The other thingis the way of working, and the
value orientation of partners,and that relates to the type of
work, the type of engagement,the type of clients, etc. But
the ways of working, is it teamoriented, collaborative
(13:33):
oriented, or is it more eatwhich you can kill a type of
culture, etc? So usually in avery early stage, we are also
focusing on the profit sharing,profit distribution type of
system, because that's quiteoften also an indication of, you
know, the collaborative natureof a firm or the group of
(13:55):
parties. So these are, I think,the two most important things
we're focusing on.
Rob Bata (14:03):
You're very interesting, and it's certainly
my experience. You know, thereare different ways that law
firms approach each other when,when they're thinking about a
potential combination and and,you know, people talk about
culture a lot, and it's verydifficult to define, but I find
(14:23):
that when there's that initialcontact, when people come away
saying, gee, I really like thatperson, that already is a sense
of how the culture may align.
Because what did they like aboutthat person. Maybe the chemistry
was good, but maybe what theperson said aligned with the way
(14:43):
this other person not only sawhis or her own firm, but how the
whole thing together might look.
So it's, it's absolutelycrucial, um, let me ask you,
since we're at the at the end ofthe year here, um. We're going
to look back a little bit andmaybe look forward to, you know,
(15:05):
the discussion in the legalworld, and occasionally in in
the in the financial world, butmore in the legal world, for the
past seven months, has beencompletely hijacked by the by
the Albury Sherman Sterlingmerger, a merger that is really
(15:25):
the first, I think, trulysignificant, and potentially, I
think, very successfultransatlantic, so called Magic
Circle merger with a US firm. Ithink it's quite significant in
a lot of ways. And I'm justwondering, what are your
thoughts about what this meansfor the large independent firms
(15:48):
in Europe, and also for law firmalliances, and maybe not even
when I say independence, I meankind of the national champions,
as opposed to ones that havelots of offices in different
parts of Europe. How do you seethat affecting the continent?
Gerard Tanja (16:07):
For the national leading top notch independence?
I think it depends on thejurisdiction. I think in those
jurisdictions where both ano andSherman have offices. I think
the national independence willbe confronted with, with with
(16:28):
with heavy competition. Socompetition will grow, and they
have to formulate an answer inother jurisdictions. And that's
actually, that's, I think, outof my head. I think it's, it's
probably Italy, Germany andFrance. I think that's where,
you know, you have, you haveGerman and a, you know, offices.
(16:49):
So I think in thosejurisdictions, I'm pretty sure
that the Italian top three, inGermany, the top three
independent and in France, theywill definitely look at this
merger, because I do think itwill affect them. I think in
other countries, I think peopleare more relaxed about it. It
(17:12):
for some firms, it could meanless referral work because of
the consolidation. But forothers, it's an opportunity, and
it could mean actually morework. You know, unless you're
part of the ano network, becausesome of the firms are part of
the of the ano Best Friendsnetwork, and they will probably
(17:34):
benefit, because they get moreinbound referral work. So it
very much depends. But I don'tthink that that national
independence will getimmediately very nervous about
this move. I think it willchange if some of the other
(17:55):
magic circles also present inthose jurisdictions will follow
the example of A and O, I thinkthat could have an impact. I
would also think that there is akind of a indirect effect, and
that is that firms which areslightly below international
(18:18):
business firms slightly belowthe top level. So, you know,
international business law firmsoperating in the upper mid
market, I think they willprobably see that they need to
to strengthen their presence incontinental European
jurisdictions. And I think Idon't, I think it's not a
(18:41):
surprise that that firms in thatrange, so whether it's CMS or
Dentons or everches, those kindof firms, you know, they will
really, they're all involved inin in European expansion
strategies and programs, And Ithink we will see more of this.
Rob Bata (19:02):
Yeah, I think, for example, and in addition, I
think firms like adelshaw,Goddard and Fisher are are
expanding fairly aggressivelyand, and I think that that's
definitely, clearly, it's not animmediate response, because some
of those expansions were plannedbefore any of that, but, but
they're definitely looking to tobump up. I think some
(19:26):
successfully, others may be, maybe overreaching a little bit,
but that's happening. I have oneother thought on this, which is,
most European firms are not amajor factor in Asia. Of course,
(19:46):
the Germans get a lot of workfrom China and so forth.
Obviously, the stronger thenational economy, the more
likely that there's going to beChina trade and investment going
back and forth. But it seems tome that. That another, another
potential fallout from the anoSherman merger for the Europeans
(20:08):
is seeing this, this great, bigentity, take shape in Europe,
which also happens to have avery strong presence in Asia,
where I suspect that moreEuropean firms will be looking
to see if there's potentialfoothold for them in Asia in
(20:29):
order to compete with that. Imay be wrong about that, but I
feel like that's an additionaldimension that this merger
brings to Europe, the fact thatit's has such a power, such a
powerful presence in Asia, andtherefore the ability to bring
more work into and out ofEurope. It's, it's, it's a, it's
(20:55):
something that I think is notthe principal focus, but I think
that people will be thinkingabout that, because Asia
continues to be and isincreasingly important in the
world's economy.
Gerard Tanja (21:07):
Yeah, I'm not sure whether I totally agree with you
here, Robert. I think it, as yousaid in the beginning, it really
depends, I think, on the on theforeign direct investment flows
between continental Europeanjurisdictions and China and and
I think there are only very fewjurisdictions Germany you
(21:31):
mentioned, where potentiallythis could be a factor. On the
other hand, what I have seenover the last five years that
many of the independent nationalfirms from several jurisdictions
in continental Europe haveactually closed their Asian
offices, with a few exceptions.
And you know, just to theNetherlands, you know our our
(21:59):
annual export to one to Germany,to the federal state of Bavaria
is is six times bigger than ourexport to China, just to put it
in perspective. Yeah. So, so Ithink for many firms in the
larger continentaljurisdictions, again, perhaps
(22:21):
with the exception of Germany,perhaps Italy. I don't think
this is a major consideration.
What. What could happen is that,as a consequence of this, this
ano Sherman merger, Europeanindependent firms will try to
(22:42):
strengthen their Europeanalliances and networks, and will
try to, in that, you know,indirectly, try to get a bigger
share of Asian business Union,for example, or Advan, or the
European Alliance of humanity,Gliese, Jeet and Catra, casas,
(23:03):
those kind of of alliances andnetworks will grow, I think,
their European as a first step,presence and visibility and
credibility and as a secondstep, may then decide, you know,
to together to do more in Asia.
I think that is, that is a morerealistic scenario. I think,
Rob Bata (23:27):
yes, I'm not, I'm not suggesting that there's going to
be a spate of new opening so,but two things, one, it's not
just about the foreign trade.
There's more. And it's certainlynot just about China. China, in
many ways, is little bit of alittle bit of a an issue for a
whole number of reasons. But youdo see, for example, the Ebert
(23:53):
Sutherland arrangement with withKing andwood malicious, where
they entered into this veryinteresting relationship of
referring work to each other andkind of dividing the globe the
way, the way the Pope didbetween the Spanish and the
(24:13):
Portuguese few 100 years ago,
Gerard Tanja (24:18):
but It was the 15th century.
Rob Bata (24:21):
We're back to that, apparently, in some ways. But in
any event, I think you will beseeing that and you look at,
well, Paris, York, in Spain,opened in Singapore, again,
there are some very interestingthings to be doing in Asia that
don't involve China. So that'skind of what I'm talking about.
(24:44):
You know, there's, there's assetmanagement work, there's,
there's near shoring type ofwork that, you know, assembling
and manufacturing and certainlylitigation. So that's where I
feel that the combined firepower. Of an ano Sherman, having
also that great, strong presencein Asia will make some firms
(25:07):
think about how to address Asiaa little bit more, how to be
more of a factor, certainly nottalking about a great spade of
Gardner's. But let's move on,because I do want to talk a
little bit about one of yourlatest projects, because you
talked about the differentapproaches in Europe and
(25:27):
different areas, and yourecently executed a merger, or
rather a market entry, for CMSin the Nordics. And talk to us a
little bit about what's going onin the Nordics and what went
into the thinking, obviously,without disclosing any
confidential matters.
Gerard Tanja (25:46):
Yeah, well, I think the CMS, and not just CMS.
There are a few other comparablefirms, upper mid markets,
Dentons, DLA, etc. They wereabsent from the Nordics until, I
would say, five years ago. Ithink DLA was the first, you
know, firm that reallysuccessfully entered the Nordic
(26:09):
markets in one go, with theexception, I think of Finland,
initially very successful. Imean, you have a schedule of
bird and bird. You have OsborneClark, but these are still
relatively small operations. AndI think CMS figured out that the
Nordics were really a blindspot, whereas, again, if you
(26:33):
look at at at you know the traderelations, the foreign direct
investment flows within Europe,but also from the US UK into the
Nordics. It's quite substantive.
So for CMS, I think it was avery strategically, a logical
action to apart from LatinAmerica, where they've also
(26:53):
entered several new markets overthe last five years, to focus
on, on the Nordics, and thefirst, the first project to
enter the Nordics was actually2021, when Kluger joined CMS in
Norway, kluge number seven oreight at that moment in, at that
time in, in Norway, then we hadtwo years of COVID and nothing,
(27:19):
nothing much happened, althoughwe had already prepared to
market entry into into Sweden,which was restaurant, which at
that time, was the number fivein terms of revenue in in
Sweden. And my prediction is, myprediction is that in the next
12 to 18 months, we will seemarket entries in Denmark, in
(27:41):
Finland, because then I thinkthe potentially, potentially
with a market entry in theBaltics as a, you know, an
ancillary action, but I thinkDenmark will definitely Follow
in the next 12 to 18 months. Andthen, and then, Finland,
Rob Bata (28:05):
I'm glad you raised the Baltics, because I'm
wondering about that too. TheBaltics Have you know some, some
excellent law firms. Isfantastic, tech practices there,
labor and employment practicesand so forth. The same time
they're on the border of anexpansionist Russia, and that's
a perilous state to be in. But Ialso happen to think that
(28:28):
there's going to be, therealready is but, but there's
going to be more interest inexpansion into the Baltics, and
I think that that will actuallybe very good for the legal for
the legal market there,
Gerard Tanja (28:42):
yeah. But what I think Rob is that that now that
CMS is there, and, you know,there were some issues with
which I think the late allprocess, process with the
regulatory framework of theSwedish Bar Association, which
is not too enthusiastic aboutinternational firms, you know,
(29:02):
coming into Stockholm andgotobark, but you know, that has
been resolved now. So what Ipredict actually, is that we
will see firms like like Dentonsand potential firms like like
field Fisher, you know, wantingto expand into the Nordics as
well. That seems to meinevitable. On the other hand, I
(29:26):
think, and that is perhapssomething we can discuss as
well, because I, I do think thatthis whole market entry of CMS
and also DLA and the growth ofthose firms in the Nordics will
will have another effect. And Ido think that. And as you know,
(29:49):
should the Norwegian the leadingfirm in Norway, you know, open
first in Sweden, then inDenmark. I think we will see, as
a consequence, we will see moreof those. Nordic expansionist
trends. I would not be surprisedif we would see another Nordic
(30:09):
combination, you know, in 2024
Rob Bata (30:14):
Yep, yeah. I think that that's right. I think that
it's, it's kind of a powerhouseregion. And there's, there's a
number of very, very, verysuccessful firms, and it would
make a lot of sense, and I thinkit makes sense for those firms
also, which have very closerelations with the Baltics, to
(30:34):
be to be looking at some sort ofentry or Alliance, or some other
arrangement with some of theleading firms there, Murray,
Unknown (30:44):
go ahead. Okay, yeah, my question, Garrett, as as you
know, as you were talking aboutthe the different markets in
Europe, where, where ao Shermanhas, they both have had some
kind of footprint, and it'sgoing to be a larger footprint
today. So Italy and France andsome of the other those law
(31:06):
firms, we'll call them legacylaw firms that are that are in
those jurisdictions. Are theyready for the increased
competition? You know, do theyhave their for example, you
know, I look at through the lensof communications and brand and
business development, you know,are they ready for this? Do they
have they? Do they have their,their their their brands honed
(31:29):
to a point where they canactually talk about the
distinctiveness of theiroffering versus, you know,
versus the, you know, the 800pound gorilla that they're, that
they're that they're going to bemanaging in in all this. So I'm
just curious, because it soundsto me like there may be some
some needs there, but, but I'dbe curious to see what your take
(31:52):
is, because you're obviouslylooking at this from a with a
with a fine
Gerard Tanja (31:56):
my tooth. I think some are, most are not. That's a
short answer, I think. Andagain, it depends on the
maturity of the jurisdiction. Ithink that that, and I, I've
been at Clifford chance for sixyears, so I can compare, I
(32:17):
think, what it means to work ina truly international firm and
and what it you know thedifference with working in a
national firm that does a lot ofinternational business, right?
And there is a huge difference.
There is a huge difference. AndI do think that in many firms,
people who work in leadingnational firms with a lot of
(32:40):
international business,underestimate the quality and
the power and the 800 poundgorilla of truly international
and global firms. So my answerwould be, in certain
jurisdictions, the firms aredefinitely ready, but in several
jurisdictions, that not thecase. And you know, in general,
(33:02):
I would say that in the Benelux,the Nordics, I think the firms
are more ready than in the moretraditional jurisdictions where
law is still more a professionthan a business. Yeah, in Italy
and Germany, Austria,Switzerland, Spain, Portugal,
(33:27):
with a few exceptions, I think,you know, there is still a lot
of work to do in the area ofcall it professionalization of
now or business supportinfrastructure to reach the
level that that internationalbusiness firms and the global
(33:48):
elite have reached in every areait HR in particular, I would
say, business development,marketing communications.
Unknown (34:01):
Well, then my brother and out there who are listening
to this, and I've got many whoare on the on the BD and
communication side, make sureyour passports are up to date.
Folks, Let's rob. I don't knowif you had a follow up question
there, but I we're, you knowwhat time is starting to,
(34:21):
starting to become an issuehere, and I just want to make
sure that we get to, you know,can't, we can't end our our
first season without Bata bestbet, and especially when we have
Gerhard here, who has, who hasput many Best Bets. It sounds
from this conversation, but, butas we were discussing before the
(34:44):
call, before the podcast, thisis the opportunity for that hot
take on to what we're looking atin 2024 what's going to be
unusual we're coming from this,as Rob You were saying earlier,
an incredibly surprising 2023Yeah. So what do you think we'll
go to you, first Rob and then,and then Gerhard. We'll, we'll
(35:05):
go to you. Yeah,
Rob Bata (35:07):
well, well, just, just to go back to that comment about
2023 we had a lot of surprises.
I think two things happened thatwere kind of earth shaking. One
of them more involved in the US.
One, of course, is ano Sherman,and the other was the stroke and
(35:29):
stroke dissolution, going out ofbusiness. This is something that
I think US firms are, orlisteners in the US may be a
little bit more involved in ormore and more interested in, but
I think it has tremendoussignificance for a number of
reasons, including the fact thatstroke had an opportunity to to
(35:55):
survive and to thrive And andenter potentially very useful
mergers, which they eithercouldn't do or wouldn't do, and
their lessons from that. Butpart of my hot take, if you
will, and when I was thinkingabout it, was there were so many
surprises last year that maybemy my hot take is that there'll
(36:15):
be even more next year, but, butI will say that there are more
strokes in the US, and we'regoing to see more and for a
number of reasons, part of whichis that the legal industry has
done so well that there's agreat deal of complacency out
there among firms that should belooking at growth strategies
(36:36):
instead. So that's one the othertwo other things, I think, after
an O Sherman, we know that theso called Magic Circle firms in
the US have kind of touted theirstrategy of growing by picking
up a few people here, a fewpeople there, sort of lateral
(36:58):
acquisitions and so forth thathas not resulted in their
acquiring either the kind ofmarket presence or position or
footprint that they enjoy prettymuch anywhere else around the
world. And I think that there'sgoing to be pressure from the
internal from from thepartnerships of those firms for
(37:19):
them to do something similar toano Sherman assuming such a
thing is available and it can beso, I think that's one. And
finally, I would say, contraryto what people are seeing now in
Hong Kong, I think there will besome law firms reevaluating
(37:42):
whether they shouldn't enter orstay in or return to Hong Kong,
partially because of a veryvibrant crypto and fintech
scene, as well as still a greatdeal of Chinese money in there,
and as long as their MMB is notconvertible Hong Kong, despite
(38:04):
the various political issues,the the data protection issues,
the security issues and soforth, I think will be on on the
to do list of some firms, atleast, to take another serious
look at that's it for me,Gerhard, what do you think?
Gerard Tanja (38:26):
Well, I would like to follow up on your second bet,
to which I agree. I think thatwhat we see in continental
Europe, what we have seen incontinental Europe, is that
various firms have reallyunderestimated and then I focus
particularly on the nationalindependence, not only the
(38:48):
leading but also the tier twofirms operating in the upper mid
market. I think we have, theyhave really underestimated the
importance of scale, scale interms of depth and breadth in
practices, in terms of beingable to offer specialized
expertise, but also have thegeneralist overview, so to the
(39:12):
strategic overview, and therebyalso, I think, disregarding a
little bit the requiredinvestment power. So to say, you
know, to be able to compete, tokeep, to maintain the
competition, and be able todefend their market share. So to
(39:33):
say, because, I think, andthat's inevitably, also because
of the war for talent that'sgoing on in a large in many
jurisdictions in continentalEurope, I think we will see more
consolidation. We will seeconsolidation by means of market
entry of international firms inseveral jurisdictions and.
(40:00):
Reaching their market share. Butwe will also see, I think,
consolidation in the upper midmarket in several jurisdictions,
the Nordics, the Benelux, Italy,Spain, etc. And I think to a
certain extent, that is theindirect effect of what's
happening at the internationallevel, at the Sherman and ano
(40:20):
level, because we will seeincreased market entries. We
will see several internationalfirms expanding in in in Europe,
Central and Eastern Europe aswell. And that will have an
effect, I think, on on, on onthe upper mid market firms you
(40:42):
know, who have to make adecision, do we join an
international platform, or do weincrease at a national level
scale in order to continue to beable to continue to compete? I
think that that's what we willsee in continental Europe.
Rob Bata (40:59):
Very insightful.
Unknown (41:01):
Yeah, yeah. So I hope everybody's listening closely,
taking notes.
Rob Bata (41:07):
Well, thank you again.
Gerard, this was absolutepleasure to have you on and to
get your insights. And this is agood time, even though I think
this podcast will probably airin 2024 let's keep in mind that
this is still last few days of2023 so I'm going to wish you
and Murray you too, very happyand healthy and successful and
(41:29):
prosperous new year. And I wishthat for our entire audience as
well, and and, and hopefullyalso a little bit more peace,
Unknown (41:45):
yes, yes, and a point of privilege, Rob, I want to
just let you know, yes. HappyNew Year. We're looking forward
to 2024 and for me, this podcastand working with you has been
one of the true bright spots ofof the of the past year and the
development of the relationship.
So thank you. And I really can'ttell you how how much this has
(42:07):
meant to me, and really doappreciate you and everything
that that you're doing. Gerhard,Wow, great to great to spend
some time with you as well. Andwe'll, we'll see you all in a
probably just a few weeks, we'llcome up with another podcast.
And as always, if you have anyquestions or ideas, please let
Rob and I know,
Rob Bata (42:29):
yeah, and likewise, same feeling, and it's a
pleasure to work with you.
Murray, thanks again. All thebest.
Gerard Tanja (42:35):
Thank you for having me. Bye. Bye. Pleasure.
You.
Rob, welcome to GMT, the podcast for globally minded
(00:05):
law firm leaders with your host,Robert Bata, principal of
Warwick place legal and MurrayCoffey, principal of M Coffey,
between them, Rob and Murrayhave about three quarters of a
century's experience workingwith some of the most notable
law firms on the planet. Thispodcast is designed to help
those law firm leaders taskedwith growth make great decisions
(00:28):
about whether and how toimplement cross border expansion
for their firms and what ittakes to succeed. And now. Rob
Bata,
Rob Bata (00:42):
hello, everyone.
Welcome back to our latestedition of GMT, which I'm proud
to say with Murray that we'venow completed the whole year
we've had a number of what wethink were very interesting
podcasts, and so we considerourselves a minor success, and
we're looking forward to manymore interesting podcasts in
(01:05):
2024 today, we're very, veryhappy and pleased to have Gerard
Tania with us. Gerard, who's inaddition to being my good
friend, is the founder ofventuris Consulting Group. He
has been for the past 30 yearsor so advising international
(01:26):
legal organizations,multinationals, alternative
legal service providers and evengovernments on strategy and
market positioning. He'sexecuted very large number of
law firm and law firm mergers,strategic reviews, market
entries, complex change process,reviews and implementations.
(01:50):
Before founding, venturis Gerardwas also in charge of he had
global responsibility for postmerger integration at Clifford
chance and as well as partnerdevelopment and a number of
other significantresponsibilities. Earlier in his
career, he was legal advisor tothe Dutch Ministry of Foreign
(02:13):
Affairs. So he was a diplomat aswell as as well as a lawyer, and
we're just delighted to welcomehim. I should also say that my
consulting firm, workplacelegal, is in a an alliance with
Ventura, strategic alliance withventuris, and we are able,
(02:34):
together with our with our otheralliance partner, Kerma
partners, to essentially coverthe entire globe with our
consulting expertise, if I may,give us a little bit of plug.
Gerard, welcome. We're really,really delighted to have you
here. I see it so it's eveningtime in Amsterdam, where you are
(02:58):
based. I should mention thatventuris, although based in
Amsterdam, is also throughoutWestern Europe. You have, you
have a presence in Sweden,Germany and France. I may be
leaving out something you you docover the entire continent of
(03:18):
Europe with your consultingwork, and we're going to be very
interested in your insights. AndI think just just to kick things
off, I'd like to understand, andI think our viewers would really
like to our listeners, wouldlike to understand a little bit
of how you approach market entryfor law firms. What? What sort
(03:44):
of activity do you? Do youenvision? How does market entry
work when you're thinking abouta law firm merger or a cross
border entry into a new legalmarket.
Gerard Tanja (04:03):
Yeah, thanks Robert for having having me in
your in your podcast. Yeah, whenwe work on market entries or
merges, which are basicallysimilar type of processes, we we
basically look at what I wouldcall the five fits in our in our
(04:25):
work, when we start the process,the first one is always the what
I would say, the culture andambition fit. You have to ensure
that the partnership, the twofirms that want to merge, or,
you know, when one firms want toone firm wants to enter the
market, you know wants toachieve you have to to ensure
(04:46):
that your ways of working, yourfew on how the market will
develop, and you do need analigned understanding of the,
let's say the respectivedrivers, drivers of the. Merger
or market entry, that's always,always the first step, I would
say the first fit. And once youknow after such a discussion,
(05:09):
you're still friends and youlike and love each other, you
focus more on the client. Fitthe practice, fit the
performance. Fit performance inthe sense of the financial,
economic KPIs of the respectivefirms on the basis of what I
call the Rules Model, therealization, the utilization,
(05:30):
the leverage, the expenses, thesort of costing and the speed of
getting the money in, the profitsharing systems, costing
structures, etc. And last, butdefinitely not least important,
as you look at at at the peoplefit, how will the staffing, the
resourcing of new co how willthat, that look like? And are
(05:54):
the issues in the people arena?
Are they being addressed likesuccession planning? How does
the leverage models compare? Dowe achieve the breadth and the
depth in the respectivepractices that we feel are
really important? And I thinkthat, you know, those five fits
(06:18):
basically determine thepotential success of a market
entry and and and and or merger.
And I think what I see in mypractice in continental Europe
depending a little bit on thematurity of the respective
(06:41):
markets, and there aredifferences in continental
Europe between the respectivemarkets. I think this, this is a
reflection of the growingmaturity of, let's say, the more
advanced continental Europeanmarkets, because you know the
(07:02):
where to play, the how to play,and can we win? Question is
getting increasingly importantto determine your competitive
edge as market segmentationbecome more and more clear in
continental Europe, especiallyin the more advanced markets. So
I think this process or approachmethodology, whatever you want
(07:25):
to call it, is something that wereally focus, focus on during
our work with, with withnational, international clients.
Rob Bata (07:37):
You know, here are one of, one of the things that we
address in this podcast is alsothe interplay between the law
firm executive, the non lawyerprofessional, if you will, and
and the the actual the lawyermanagement. And I wonder if, if
(08:02):
you could talk a little bit, andI think, I think very well, have
more questions on this. Yeah, ifyou could talk a little bit
about when, when you look atthese five fits and and you
start the process, who are thepeople you're talking to?
Gerard Tanja (08:19):
That's, that's an interesting question, because,
again, it, I think it dependsvery much on the maturity of the
respective markets, and therebythe maturity of the respective
firms in the more mature firms.
I would think that, you know, wespeak in first instance, is
always with leadership andmanagement. Always, however, as
(08:42):
soon as the initial duediligence starts, what we see,
and we are currently engaged insuch a process, we see that non
lawyers are increasinglyinvolved in in in the due
diligence, and also in alreadyshaping the strategy and the
(09:05):
positioning of of new CO of thenew firm. And I think it is not
just the international firmsactive on the continent who are,
who are doing this, I also seethat the top tier, the leading
national independence ininvolved in such processes that
(09:27):
follow, increasingly, thosethose steps. So what we do see,
especially in HR, IT BDM, sobusiness development, marketing,
top notch non lawyers areinvolved from the beginning of
the process
Unknown (09:49):
and get hurt. You know, sorry,
Gerard Tanja (09:51):
sorry. Murray, one more. Please, please, if I
compare that to, let's say, 10years ago, Robert, that would
not have happened. And. Now ishappening, and I think it has to
do with the quality of the nonlawyers involved in in law firm
strategy discussions.
Unknown (10:11):
I agree with you. I'm a completely I too, have have
seen, you know, an increase inthe activity of people who come
from my side of the of theequation, getting involved
earlier and earlier Rob, Rob andI, that's how we got to know
each other, because I wasbrought in very early on a on a
on a possible merger. And it, itwas very helpful, I think, in in
(10:35):
in the immediate term and in thelong term, and figuring out how
to position question for you,and I want to go back. I love
this. The concept of the fivefits. It's great. It's just a
wonderful way, sort ofcontextualizing how an entity
can look at whether it's theright thing to do, whether that
(10:57):
whether the merger is the rightthing to do. And I was
especially impressed with yourfocus on culture as as being one
of the one of the very firstinitial considerations. I don't
think that's always that'salways the case with many
mergers. I think Rob and I haveseen mergers where culture was
(11:18):
ignored, and much to the perilof the of the of the merged,
emerged entities. And so whenyou're inquiring about culture,
what do you hear? What are the,what are the triggers that you
hear that say, okay, these are,this is a these are two entities
(11:40):
where we can figure out a way tomesh the cultures. I'm not gonna
say match or merge, say mesh,because it's not always a
perfect fit. We've talked aboutthis, you know, in the past,
with with some branding folksthat I know. But how do you
know? What do you hear? What'sthe what are your, you know,
indicia, if you will, of of a ofa of complimentary cultures.
Gerard Tanja (12:06):
Yeah, I think the first thing we usually do
because it, it, it's, it's veryimportant. I think because you
have to work, it's not acorporate you're dealing with.
It's, it's, it's, it's apartnership which is quite often
quite different. The first thingwe always try to establish is to
(12:30):
well, to figure out whether theambition and aspiration level of
the core partners in the corepractices of new CO are aligned.
And when I say ambitions, thatcan be professional ambitions,
it can be the type of work. Itcan be ambitions with respect to
(12:51):
clients, to financial, economicfactors, to the organizational
aspects of a potential merger,it can be everything. But that
is, I think, the first thing wetry to establish. So it's a very
methodology, maybe approach.
That's one thing. The otherthing, I think, we're focusing
on, and we use some someinstruments for that, and some
(13:12):
validated tools. The other thingis the way of working, and the
value orientation of partners,and that relates to the type of
work, the type of engagement,the type of clients, etc. But
the ways of working, is it teamoriented, collaborative
(13:33):
oriented, or is it more eatwhich you can kill a type of
culture, etc? So usually in avery early stage, we are also
focusing on the profit sharing,profit distribution type of
system, because that's quiteoften also an indication of, you
know, the collaborative natureof a firm or the group of
(13:55):
parties. So these are, I think,the two most important things
we're focusing on.
Rob Bata (14:03):
You're very interesting, and it's certainly
my experience. You know, thereare different ways that law
firms approach each other when,when they're thinking about a
potential combination and and,you know, people talk about
culture a lot, and it's verydifficult to define, but I find
(14:23):
that when there's that initialcontact, when people come away
saying, gee, I really like thatperson, that already is a sense
of how the culture may align.
Because what did they like aboutthat person. Maybe the chemistry
was good, but maybe what theperson said aligned with the way
(14:43):
this other person not only sawhis or her own firm, but how the
whole thing together might look.
So it's, it's absolutelycrucial, um, let me ask you,
since we're at the at the end ofthe year here, um. We're going
to look back a little bit andmaybe look forward to, you know,
(15:05):
the discussion in the legalworld, and occasionally in in
the in the financial world, butmore in the legal world, for the
past seven months, has beencompletely hijacked by the by
the Albury Sherman Sterlingmerger, a merger that is really
(15:25):
the first, I think, trulysignificant, and potentially, I
think, very successfultransatlantic, so called Magic
Circle merger with a US firm. Ithink it's quite significant in
a lot of ways. And I'm justwondering, what are your
thoughts about what this meansfor the large independent firms
(15:48):
in Europe, and also for law firmalliances, and maybe not even
when I say independence, I meankind of the national champions,
as opposed to ones that havelots of offices in different
parts of Europe. How do you seethat affecting the continent?
Gerard Tanja (16:07):
For the national leading top notch independence?
I think it depends on thejurisdiction. I think in those
jurisdictions where both ano andSherman have offices. I think
the national independence willbe confronted with, with with
(16:28):
with heavy competition. Socompetition will grow, and they
have to formulate an answer inother jurisdictions. And that's
actually, that's, I think, outof my head. I think it's, it's
probably Italy, Germany andFrance. I think that's where,
you know, you have, you haveGerman and a, you know, offices.
(16:49):
So I think in thosejurisdictions, I'm pretty sure
that the Italian top three, inGermany, the top three
independent and in France, theywill definitely look at this
merger, because I do think itwill affect them. I think in
other countries, I think peopleare more relaxed about it. It
(17:12):
for some firms, it could meanless referral work because of
the consolidation. But forothers, it's an opportunity, and
it could mean actually morework. You know, unless you're
part of the ano network, becausesome of the firms are part of
the of the ano Best Friendsnetwork, and they will probably
(17:34):
benefit, because they get moreinbound referral work. So it
very much depends. But I don'tthink that that national
independence will getimmediately very nervous about
this move. I think it willchange if some of the other
(17:55):
magic circles also present inthose jurisdictions will follow
the example of A and O, I thinkthat could have an impact. I
would also think that there is akind of a indirect effect, and
that is that firms which areslightly below international
(18:18):
business firms slightly belowthe top level. So, you know,
international business law firmsoperating in the upper mid
market, I think they willprobably see that they need to
to strengthen their presence incontinental European
jurisdictions. And I think Idon't, I think it's not a
(18:41):
surprise that that firms in thatrange, so whether it's CMS or
Dentons or everches, those kindof firms, you know, they will
really, they're all involved inin in European expansion
strategies and programs, And Ithink we will see more of this.
Rob Bata (19:02):
Yeah, I think, for example, and in addition, I
think firms like adelshaw,Goddard and Fisher are are
expanding fairly aggressivelyand, and I think that that's
definitely, clearly, it's not animmediate response, because some
of those expansions were plannedbefore any of that, but, but
they're definitely looking to tobump up. I think some
(19:26):
successfully, others may be, maybe overreaching a little bit,
but that's happening. I have oneother thought on this, which is,
most European firms are not amajor factor in Asia. Of course,
(19:46):
the Germans get a lot of workfrom China and so forth.
Obviously, the stronger thenational economy, the more
likely that there's going to beChina trade and investment going
back and forth. But it seems tome that. That another, another
potential fallout from the anoSherman merger for the Europeans
(20:08):
is seeing this, this great, bigentity, take shape in Europe,
which also happens to have avery strong presence in Asia,
where I suspect that moreEuropean firms will be looking
to see if there's potentialfoothold for them in Asia in
(20:29):
order to compete with that. Imay be wrong about that, but I
feel like that's an additionaldimension that this merger
brings to Europe, the fact thatit's has such a power, such a
powerful presence in Asia, andtherefore the ability to bring
more work into and out ofEurope. It's, it's, it's a, it's
(20:55):
something that I think is notthe principal focus, but I think
that people will be thinkingabout that, because Asia
continues to be and isincreasingly important in the
world's economy.
Gerard Tanja (21:07):
Yeah, I'm not sure whether I totally agree with you
here, Robert. I think it, as yousaid in the beginning, it really
depends, I think, on the on theforeign direct investment flows
between continental Europeanjurisdictions and China and and
I think there are only very fewjurisdictions Germany you
(21:31):
mentioned, where potentiallythis could be a factor. On the
other hand, what I have seenover the last five years that
many of the independent nationalfirms from several jurisdictions
in continental Europe haveactually closed their Asian
offices, with a few exceptions.
And you know, just to theNetherlands, you know our our
(21:59):
annual export to one to Germany,to the federal state of Bavaria
is is six times bigger than ourexport to China, just to put it
in perspective. Yeah. So, so Ithink for many firms in the
larger continentaljurisdictions, again, perhaps
(22:21):
with the exception of Germany,perhaps Italy. I don't think
this is a major consideration.
What. What could happen is that,as a consequence of this, this
ano Sherman merger, Europeanindependent firms will try to
(22:42):
strengthen their Europeanalliances and networks, and will
try to, in that, you know,indirectly, try to get a bigger
share of Asian business Union,for example, or Advan, or the
European Alliance of humanity,Gliese, Jeet and Catra, casas,
(23:03):
those kind of of alliances andnetworks will grow, I think,
their European as a first step,presence and visibility and
credibility and as a secondstep, may then decide, you know,
to together to do more in Asia.
I think that is, that is a morerealistic scenario. I think,
Rob Bata (23:27):
yes, I'm not, I'm not suggesting that there's going to
be a spate of new opening so,but two things, one, it's not
just about the foreign trade.
There's more. And it's certainlynot just about China. China, in
many ways, is little bit of alittle bit of a an issue for a
whole number of reasons. But youdo see, for example, the Ebert
(23:53):
Sutherland arrangement with withKing andwood malicious, where
they entered into this veryinteresting relationship of
referring work to each other andkind of dividing the globe the
way, the way the Pope didbetween the Spanish and the
(24:13):
Portuguese few 100 years ago,
Gerard Tanja (24:18):
but It was the 15th century.
Rob Bata (24:21):
We're back to that, apparently, in some ways. But in
any event, I think you will beseeing that and you look at,
well, Paris, York, in Spain,opened in Singapore, again,
there are some very interestingthings to be doing in Asia that
don't involve China. So that'skind of what I'm talking about.
(24:44):
You know, there's, there's assetmanagement work, there's,
there's near shoring type ofwork that, you know, assembling
and manufacturing and certainlylitigation. So that's where I
feel that the combined firepower. Of an ano Sherman, having
also that great, strong presencein Asia will make some firms
(25:07):
think about how to address Asiaa little bit more, how to be
more of a factor, certainly nottalking about a great spade of
Gardner's. But let's move on,because I do want to talk a
little bit about one of yourlatest projects, because you
talked about the differentapproaches in Europe and
(25:27):
different areas, and yourecently executed a merger, or
rather a market entry, for CMSin the Nordics. And talk to us a
little bit about what's going onin the Nordics and what went
into the thinking, obviously,without disclosing any
confidential matters.
Gerard Tanja (25:46):
Yeah, well, I think the CMS, and not just CMS.
There are a few other comparablefirms, upper mid markets,
Dentons, DLA, etc. They wereabsent from the Nordics until, I
would say, five years ago. Ithink DLA was the first, you
know, firm that reallysuccessfully entered the Nordic
(26:09):
markets in one go, with theexception, I think of Finland,
initially very successful. Imean, you have a schedule of
bird and bird. You have OsborneClark, but these are still
relatively small operations. AndI think CMS figured out that the
Nordics were really a blindspot, whereas, again, if you
(26:33):
look at at at you know the traderelations, the foreign direct
investment flows within Europe,but also from the US UK into the
Nordics. It's quite substantive.
So for CMS, I think it was avery strategically, a logical
action to apart from LatinAmerica, where they've also
(26:53):
entered several new markets overthe last five years, to focus
on, on the Nordics, and thefirst, the first project to
enter the Nordics was actually2021, when Kluger joined CMS in
Norway, kluge number seven oreight at that moment in, at that
time in, in Norway, then we hadtwo years of COVID and nothing,
(27:19):
nothing much happened, althoughwe had already prepared to
market entry into into Sweden,which was restaurant, which at
that time, was the number fivein terms of revenue in in
Sweden. And my prediction is, myprediction is that in the next
12 to 18 months, we will seemarket entries in Denmark, in
(27:41):
Finland, because then I thinkthe potentially, potentially
with a market entry in theBaltics as a, you know, an
ancillary action, but I thinkDenmark will definitely Follow
in the next 12 to 18 months. Andthen, and then, Finland,
Rob Bata (28:05):
I'm glad you raised the Baltics, because I'm
wondering about that too. TheBaltics Have you know some, some
excellent law firms. Isfantastic, tech practices there,
labor and employment practicesand so forth. The same time
they're on the border of anexpansionist Russia, and that's
a perilous state to be in. But Ialso happen to think that
(28:28):
there's going to be, therealready is but, but there's
going to be more interest inexpansion into the Baltics, and
I think that that will actuallybe very good for the legal for
the legal market there,
Gerard Tanja (28:42):
yeah. But what I think Rob is that that now that
CMS is there, and, you know,there were some issues with
which I think the late allprocess, process with the
regulatory framework of theSwedish Bar Association, which
is not too enthusiastic aboutinternational firms, you know,
(29:02):
coming into Stockholm andgotobark, but you know, that has
been resolved now. So what Ipredict actually, is that we
will see firms like like Dentonsand potential firms like like
field Fisher, you know, wantingto expand into the Nordics as
well. That seems to meinevitable. On the other hand, I
(29:26):
think, and that is perhapssomething we can discuss as
well, because I, I do think thatthis whole market entry of CMS
and also DLA and the growth ofthose firms in the Nordics will
will have another effect. And Ido think that. And as you know,
(29:49):
should the Norwegian the leadingfirm in Norway, you know, open
first in Sweden, then inDenmark. I think we will see, as
a consequence, we will see moreof those. Nordic expansionist
trends. I would not be surprisedif we would see another Nordic
(30:09):
combination, you know, in 2024
Rob Bata (30:14):
Yep, yeah. I think that that's right. I think that
it's, it's kind of a powerhouseregion. And there's, there's a
number of very, very, verysuccessful firms, and it would
make a lot of sense, and I thinkit makes sense for those firms
also, which have very closerelations with the Baltics, to
(30:34):
be to be looking at some sort ofentry or Alliance, or some other
arrangement with some of theleading firms there, Murray,
Unknown (30:44):
go ahead. Okay, yeah, my question, Garrett, as as you
know, as you were talking aboutthe the different markets in
Europe, where, where ao Shermanhas, they both have had some
kind of footprint, and it'sgoing to be a larger footprint
today. So Italy and France andsome of the other those law
(31:06):
firms, we'll call them legacylaw firms that are that are in
those jurisdictions. Are theyready for the increased
competition? You know, do theyhave their for example, you
know, I look at through the lensof communications and brand and
business development, you know,are they ready for this? Do they
have they? Do they have their,their their their brands honed
(31:29):
to a point where they canactually talk about the
distinctiveness of theiroffering versus, you know,
versus the, you know, the 800pound gorilla that they're, that
they're that they're going to bemanaging in in all this. So I'm
just curious, because it soundsto me like there may be some
some needs there, but, but I'dbe curious to see what your take
(31:52):
is, because you're obviouslylooking at this from a with a
with a fine
Gerard Tanja (31:56):
my tooth. I think some are, most are not. That's a
short answer, I think. Andagain, it depends on the
maturity of the jurisdiction. Ithink that that, and I, I've
been at Clifford chance for sixyears, so I can compare, I
(32:17):
think, what it means to work ina truly international firm and
and what it you know thedifference with working in a
national firm that does a lot ofinternational business, right?
And there is a huge difference.
There is a huge difference. AndI do think that in many firms,
people who work in leadingnational firms with a lot of
(32:40):
international business,underestimate the quality and
the power and the 800 poundgorilla of truly international
and global firms. So my answerwould be, in certain
jurisdictions, the firms aredefinitely ready, but in several
jurisdictions, that not thecase. And you know, in general,
(33:02):
I would say that in the Benelux,the Nordics, I think the firms
are more ready than in the moretraditional jurisdictions where
law is still more a professionthan a business. Yeah, in Italy
and Germany, Austria,Switzerland, Spain, Portugal,
(33:27):
with a few exceptions, I think,you know, there is still a lot
of work to do in the area ofcall it professionalization of
now or business supportinfrastructure to reach the
level that that internationalbusiness firms and the global
(33:48):
elite have reached in every areait HR in particular, I would
say, business development,marketing communications.
Unknown (34:01):
Well, then my brother and out there who are listening
to this, and I've got many whoare on the on the BD and
communication side, make sureyour passports are up to date.
Folks, Let's rob. I don't knowif you had a follow up question
there, but I we're, you knowwhat time is starting to,
(34:21):
starting to become an issuehere, and I just want to make
sure that we get to, you know,can't, we can't end our our
first season without Bata bestbet, and especially when we have
Gerhard here, who has, who hasput many Best Bets. It sounds
from this conversation, but, butas we were discussing before the
(34:44):
call, before the podcast, thisis the opportunity for that hot
take on to what we're looking atin 2024 what's going to be
unusual we're coming from this,as Rob You were saying earlier,
an incredibly surprising 2023Yeah. So what do you think we'll
go to you, first Rob and then,and then Gerhard. We'll, we'll
(35:05):
go to you. Yeah,
Rob Bata (35:07):
well, well, just, just to go back to that comment about
2023 we had a lot of surprises.
I think two things happened thatwere kind of earth shaking. One
of them more involved in the US.
One, of course, is ano Sherman,and the other was the stroke and
(35:29):
stroke dissolution, going out ofbusiness. This is something that
I think US firms are, orlisteners in the US may be a
little bit more involved in ormore and more interested in, but
I think it has tremendoussignificance for a number of
reasons, including the fact thatstroke had an opportunity to to
(35:55):
survive and to thrive And andenter potentially very useful
mergers, which they eithercouldn't do or wouldn't do, and
their lessons from that. Butpart of my hot take, if you
will, and when I was thinkingabout it, was there were so many
surprises last year that maybemy my hot take is that there'll
(36:15):
be even more next year, but, butI will say that there are more
strokes in the US, and we'regoing to see more and for a
number of reasons, part of whichis that the legal industry has
done so well that there's agreat deal of complacency out
there among firms that should belooking at growth strategies
(36:36):
instead. So that's one the othertwo other things, I think, after
an O Sherman, we know that theso called Magic Circle firms in
the US have kind of touted theirstrategy of growing by picking
up a few people here, a fewpeople there, sort of lateral
(36:58):
acquisitions and so forth thathas not resulted in their
acquiring either the kind ofmarket presence or position or
footprint that they enjoy prettymuch anywhere else around the
world. And I think that there'sgoing to be pressure from the
internal from from thepartnerships of those firms for
(37:19):
them to do something similar toano Sherman assuming such a
thing is available and it can beso, I think that's one. And
finally, I would say, contraryto what people are seeing now in
Hong Kong, I think there will besome law firms reevaluating
(37:42):
whether they shouldn't enter orstay in or return to Hong Kong,
partially because of a veryvibrant crypto and fintech
scene, as well as still a greatdeal of Chinese money in there,
and as long as their MMB is notconvertible Hong Kong, despite
(38:04):
the various political issues,the the data protection issues,
the security issues and soforth, I think will be on on the
to do list of some firms, atleast, to take another serious
look at that's it for me,Gerhard, what do you think?
Gerard Tanja (38:26):
Well, I would like to follow up on your second bet,
to which I agree. I think thatwhat we see in continental
Europe, what we have seen incontinental Europe, is that
various firms have reallyunderestimated and then I focus
particularly on the nationalindependence, not only the
(38:48):
leading but also the tier twofirms operating in the upper mid
market. I think we have, theyhave really underestimated the
importance of scale, scale interms of depth and breadth in
practices, in terms of beingable to offer specialized
expertise, but also have thegeneralist overview, so to the
(39:12):
strategic overview, and therebyalso, I think, disregarding a
little bit the requiredinvestment power. So to say, you
know, to be able to compete, tokeep, to maintain the
competition, and be able todefend their market share. So to
(39:33):
say, because, I think, andthat's inevitably, also because
of the war for talent that'sgoing on in a large in many
jurisdictions in continentalEurope, I think we will see more
consolidation. We will seeconsolidation by means of market
entry of international firms inseveral jurisdictions and.
(40:00):
Reaching their market share. Butwe will also see, I think,
consolidation in the upper midmarket in several jurisdictions,
the Nordics, the Benelux, Italy,Spain, etc. And I think to a
certain extent, that is theindirect effect of what's
happening at the internationallevel, at the Sherman and ano
(40:20):
level, because we will seeincreased market entries. We
will see several internationalfirms expanding in in in Europe,
Central and Eastern Europe aswell. And that will have an
effect, I think, on on, on onthe upper mid market firms you
(40:42):
know, who have to make adecision, do we join an
international platform, or do weincrease at a national level
scale in order to continue to beable to continue to compete? I
think that that's what we willsee in continental Europe.
Rob Bata (40:59):
Very insightful.
Unknown (41:01):
Yeah, yeah. So I hope everybody's listening closely,
taking notes.
Rob Bata (41:07):
Well, thank you again.
Gerard, this was absolutepleasure to have you on and to
get your insights. And this is agood time, even though I think
this podcast will probably airin 2024 let's keep in mind that
this is still last few days of2023 so I'm going to wish you
and Murray you too, very happyand healthy and successful and
(41:29):
prosperous new year. And I wishthat for our entire audience as
well, and and, and hopefullyalso a little bit more peace,
Unknown (41:45):
yes, yes, and a point of privilege, Rob, I want to
just let you know, yes. HappyNew Year. We're looking forward
to 2024 and for me, this podcastand working with you has been
one of the true bright spots ofof the of the past year and the
development of the relationship.
So thank you. And I really can'ttell you how how much this has
(42:07):
meant to me, and really doappreciate you and everything
that that you're doing. Gerhard,Wow, great to great to spend
some time with you as well. Andwe'll, we'll see you all in a
probably just a few weeks, we'llcome up with another podcast.
And as always, if you have anyquestions or ideas, please let
Rob and I know,
Rob Bata (42:29):
yeah, and likewise, same feeling, and it's a
pleasure to work with you.
Murray, thanks again. All thebest.
Gerard Tanja (42:35):
Thank you for having me. Bye. Bye. Pleasure.
You.
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