Welcome to part two of GMT’s season opener. Murray and Rob are joined by media pro and founder of Byfield, Gus Sellitto.
In this insightful episode, we explore the intricate balance global firms must strike as they navigate the challenging role of maintaining a global voice within diverse local markets.
Key points discussed include:
- Collaboration with Internal Teams: Gus explores how external consultants complement in-house PR by offering specialized insights and a broad market perspective, particularly useful in crisis and reputation management.
- Harmonizing Global and Local Values: We discuss how a law firm’s global values, such as respecting diversity and upholding certain ethical standards, can coexist harmoniously with the local laws and customs of the places where they have offices.
- Challenges of Balancing Acts: Finally, we look at the gray areas in balancing global firm values with local laws. And we conclude that although challenging, it is possible to successfully navigate without compromising on either front.
Please stay tuned for the next edition of GMT: The Podcast for Globally Minded Law Firm Leaders.
For more information contact:
Gus Sellitto
Rob Bata
Murray Coffey
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
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Unknown (00:00):
Um, welcome to part two of GMTs conversation with
(00:07):
Byfield founder Gus solito.
Rob Bata (00:12):
So let's so let's go back to to risk management and
PR, or, versus PR, or includingPR, what? What is it you you
talk about how leading law firmsnow all have internal resources,
and what is your process interms of how you deal with with
(00:33):
the internal legal executive,with the internal executive team
and and who are the people thatyou normally work with in terms
of, terms of the services thatyou provide, and how does that
come about?
Gus Sellitto (00:51):
Well, as you know, Robert now, most of the larger
law firms, all of them, willhave in house, PR and marketing
teams, and they're very, veryestablished teams, and very good
at what they what they do, butit's a finite resource, and so
there will always be space androom for external consultants to
come in, who can bring you know,particularly when you look at
(01:12):
reputation management andcrisis, they can bring a sort of
dispassionate view to some ofthe issues that a law firm may
be facing. We can also bring akind of horizon scanning view of
what the rest of the marketdoes. We specialize in the legal
sector, so it's our business tobe looking at what other law
firms are doing, how the marketis developing, what the media is
(01:34):
writing about, where the nextbig legislative change might
happen, and how that's impactingthe reputation of the sector as
a whole, but also individual lawfirms operating globally or
locally. And I think that kindof horizon scanning view and
that dispassionate view when itcomes to crisis and more sticky
(01:56):
reputational issues can be areal benefit for law firms to be
able to bring in that expertise,certainly in terms of what we do
on the more brand, buildingproactive PR sides, again, as I
say, law firms don't you know,teams are much, much larger than
they were a few years ago, butit's a finite resource. So you
may have a project or acampaign, let's say, you know,
(02:20):
insolvencies are up because ofwhere the economy is. You want
to do a big push intoinsolvency, you would perhaps
bring in an external PR agencylike us to help you devise that
campaign to give your internalteam that additional resource
that's required on a project byproject basis. And obviously the
(02:41):
great thing about bringingconsultancies in is you can
flex. You can flex that musclefor peak times, peaks and
troughs of when you're doingprofile raising and campaigns.
And this is across the board. Itcan be marketing consultants. It
clearly applies to what you doas well to what you both do. But
having agencies that reallyunderstand your market, the
(03:05):
industry and the clients you'retrying to reach, I think, can be
very, very valuable. That'scertainly why people that's
certainly why our clients callus in when it comes to crisis
and risk and where law firms arefacing litigation, it's very
good to often take that awayfrom the in house, PR, who's
(03:25):
focusing on the corecommunications and the good
news, you want to try andisolate that incident as much as
possible. And again, thatincident can take a hell of a
lot of headroom up. You know, itcan be all consuming for two
weeks or two months or evenlonger, depending on how big the
issue is, and therefore bringingin external counsel, PR counsel,
(03:46):
whatever the expertise might be,can be very, very useful for
those firms. So we're seeingincreased demand, because law
firms are offering moreservices, more products, more
initiatives. They are wanting toget good brand building PR
around those campaigns. So we'redoing a lot more campaigns.
(04:06):
We're doing a lot more practicearea support that, as I say,
supports a particular marketmovement or an initiative a law
firm is involved in. And then,of course, the crisis in
litigation and risk andreputation management, for all
the things I said earlier aboutthe global environment just
becoming much more in the publicglare, that that leads to a lot
(04:28):
more instructions for us aswell.
Rob Bata (04:31):
And so it I'd like to have your perspective also on
the not quite crisis type ofsituation, but as you say,
market developments and soforth. And especially from my
perspective, what I do is lawfirm mergers, including cross
border ones, and where does whatyou do come into that in terms
(04:58):
of both the messaging. Andperhaps, in some cases, dealing
with what might be some negativeperceptions about a proposed
merger or an actual merger thatis already happening.
Gus Sellitto (05:10):
Well, this is an area that that you know, you and
I would work very, very closelyon Robert the you know, the
whole point around mergercommunications is they are often
leaked at the discussion phase.
And if you're ill prepared ornot prepared for that leak, it's
kind of the genie is out of thebottle. You haven't been able to
prepare messaging around therationale some of the internal
(05:30):
discussions that may be goingon, you know it may mean that
the media gets to know about theproposed discussions before your
internal people even have, havegot to know about this, and that
sets the wrong tone andnarrative from the start. So
communications around merger,talks and discussions, you know,
(05:54):
we know there's a there's a longprocess to them, there's the
discussion, then there's a voteso there is, there is a process
that that needs to be followedand making sure that you're
prepared for any leak scenarios.
While those discussions areongoing, preparing a really
detailed communications pack asto the rationale for the merger,
(06:14):
what it will mean for yourpeople, what it will mean for
your clients, all of that preplanning work needs to go on way
in advance of any potential leakscenario being possible and
prepared for any leak scenario.
And then, of course, you'regoing to get the difficult
questions aroundrationalization. What does this
mean in terms of job securityand all of that needs to be
prepared for to give thosediscussions the best chance to
(06:38):
progress and to ensure that whenthe information does come out,
whether it's leaked or you'veproactively put it out, you're
sending the right message to themarket, internal stakeholders,
external stakeholders, andyou're giving those discussions
the best chance of success. Imean, we talked about that, you
know, obviously the big anoSherman, the way those
(07:02):
communications were handled wereexcellent. In terms of, there
was a microsite that wasprepared. And we were talking
about the big merger recently,Trans Atlantic. The way those
communications were prepared,there was an announcement in the
Financial Times, I think, thaton the Sunday, there was a
microsite ready with a Q and Athere would have been a lot of
(07:24):
background stakeholdercommunications going on in
advance of that, and I thinkthat set the tone for a positive
process to happen. But veryinterested to hear how your
experience being on the advisoryside of the M and A process.
Robert,
Rob Bata (07:42):
well, my experience is very much to reduce it to a
simple sentence. Is a leak isalmost always a death sentence,
if once it gets into the pressat the wrong time without
appropriate management of thesituation, almost invariably,
(08:04):
will result in the merger nottaking place, or enough people
walking away from it that thatit's no good. This is just not
likely to happen. And of course,the longer that a prospective
merger is in the public eye asstill being discussed, the more
(08:24):
likely it is that, one, it wassubject of a leak, and two, that
it's not going to go anywhere.
And then there are a number ofthose, those situations that
that have happened. So I thinkthat's very important. Going
back to the ano Sherman, I thinkone of the you're absolutely
right, that was fantasticallymanaged. And one of the things
that I think I mentioned on thispodcast before, as I understood
(08:46):
it, it was so well prepared thaton that Sunday, or perhaps it
was Saturday, when they decidedto release it, apparently the
small group that was putting allof this together got wind of the
fact that there might be a leak,and so they accelerated the
(09:09):
release of the informationseveral hours earlier. And but,
but we're so well prepared to dothat that they could do it and
and so that that was able todeal with that issue in advance
and very successfully so. But Ifound, if you look at the
example, for example, of thevery unfortunate law firm of
(09:34):
stroke and stricken Levan in theUS, for a couple of years now,
there have been discussions inout in the open, about how
they're seeking a mergerpartner, one after the other.
And every time one was mentionedas a real likelihood or real
possibility, it it just wentaway. And it happened when
(09:54):
Melvin, a Myers, was was. Havinga discussion with a with with a
magic circle firm. It happenedwith a with a number of others.
It's it's very, very difficultto manage a leak unless you're
absolutely prepared, internallyand externally, to either have
(10:18):
an explanation of what leak isabout, or be able truthfully to
deny the subject of the leak. Soit's the those are often, I
think, close to irreparablesituations, but, but leaving
(10:38):
aside the leak side of it, Ithink you're absolutely right
that you do have to prepare themarket, and you have to prepare
the rationale and and that part,I found, is often not always
that well handled. And I canthink of certain examples where
(11:01):
large law firms have expandedinto countries in a way that
really didn't seem to make sensefor a lot of people, other than
to put to put some flags on themap. And I can say this now,
because certainly there was muchof that perception about dentin
(11:22):
so merging up with Da Chang,which was what the real merger.
And of course, now they'vepulled back from all that. But
certainly in the legal market,it never seemed to make sense,
because simply having another10,000 lawyers or 8000 lawyers
distributed all over China. Madeno sense at all, but let's talk
about China for a second. How.
(11:49):
How does one manage, not simplyreputation, but political risk
or security risk where you havea law firm that does business on
the mainland, also doesbusiness, perhaps in Hong Kong,
but there are, in fact, a lot ofgeopolitical tensions. There are
(12:12):
also data security issues, and Iwould mention the Latham and
Watkins, which recentlyannounced that their Hong Kong
staff will no longer have accessto to the internet, essentially
because of worries about Chinesesecurity laws. Is there a way to
(12:35):
handle those kinds of issues andat the same time be able to
forestall a negative reaction, anegative political reaction
from, say, Mainland China.
Gus Sellitto (12:53):
It's a tricky one.
This one. Robert, yeah, yeah, Iknow, yeah. I mean, I'm
interested to get your views.
Rob Bata (13:01):
Yeah. Well, I mean, honestly, my view is that in
sometimes you have to fall backon technicalities, yeah, and
say, well, our operation, well,just, let's stick with China.
Again. I don't just want tosingle them out, but, but let's
stick with China for a minute.
You fall back on thetechnicality that says, well,
(13:21):
the the operating entity that wehave in the country that we are
worried about offending isreally a separate entity, and
it's licensed by the localauthorities, and it has a a an
affiliate or a partner firmthat's that's also mainland
Chinese, and of course, theyhave their own. They are
(13:45):
politically pristine, andtherefore we've taken this step
on that side of the divide, butit really doesn't affect what we
do on the other side of thedivide, because it's there, are
there. It's technically adifferent operation. But I think
(14:06):
it's extremely difficult, and Ithink it's become very difficult
for a number of firms that I'mpersonally aware of, firms that
have been scratching their headsabout how to move forward in
China and on the mainland. Andof course, part of that
calculation is a strict businesscalculation. Most law firms
don't have a very profitablepresence on the mainland in
(14:31):
China, but have been therebecause their clients need them
to be there. They feel that theyneed to be seen there. And
except for those firms that havebeen there for a long, long time
and have developed very, verystrong relationships with the
regulators and and other lawfirms, a China presence is
tricky. And, and, and you'veseen, you've seen. A number of
(14:58):
firms, including last year,pulling up stakes from the
mainland. Then there are otherreasons why some firms have left
Hong Kong too, and that that mayhas a lot to do with the
security environment, but italso has to do with the fact
that there's much less MNA goingon and so forth. I happen to
think that Hong Kong is still avery strong place to be, and I
(15:20):
actually counsel clients withthe appropriate types of
practices that it's a good placeto stay or still to enter,
especially in the sort ofFinTech and crypto areas, but
also in disputes and so forth.
(15:41):
So I'm not writing off Hong Kongat all, but it's a very
different environment, and it'snot the kind of place where you
can expect a lot of M and Aactivity going on and listings,
dual listings, in Hong Kongreally don't pay that much for
law firms to do that. It'sbecome very commoditized. So
(16:02):
that's, that's my perspective.
It's, it's, it's extremelydifficult. You mentioned
earlier, it was very easy forlaw firms to say, well, we're
pulling out of Russia. But ofcourse, that had a lot to do
with the fact that you've got agigantic land war of the sort
that we haven't seen since WorldWar Two, where you've got an
(16:24):
obvious aggressor, and it's veryclear what's what's going on and
why US firms can no longer readit, not to mention, of course,
actual Danger, physical danger,to to Western lawyers practicing
in Russia, it's very differentwhere you're simply where you're
(16:46):
simply confronting a verydifferent and perhaps
adversarial entity, but withwhich you're not really in
active conflict other than kindof Commercial and in terms of
trade wars, and so China reallyrepresents that in between is
the Saudi situation, where SaudiArabia, of course, has a
(17:09):
reputation that doesn't fly verywell with the West And and for
for obvious reasons, but wherealso access, access to that
market, and access to the MiddleEast and the Gulf states
generally, has been very, very,very important for law firms and
(17:31):
their clients. So it's, it's,it's a somewhat different
calculus, and it seems to methat so far, there hasn't been
that much backlash against whathas been a spate of US and UK
law firms opening in SaudiArabia, in Riyadh. I mean,
that's it's now well over adozen that have opened since the
(17:53):
since the liberalization of theregulations in Saudi Arabia. But
I suspect that even for thosewho have have done the work and
have opened offices there and soforth, that they've, they've,
they've had some access to to ato reputation management and
(18:13):
this, we're not talking hereabout identifying any clients or
anything like that. But I wouldassume that you would agree that
in going into a place like SaudiArabia, you would definitely
want to manage your publicrelations and your reputation in
advance.
Gus Sellitto (18:33):
Absolutely, Robert and there have been a there's
been a rush to Riyadh and Saudiand there have been articles
that have questioned a law firmpositioning in that region, vis
a vis its kind of global valuesand its global statements around
human rights and diversity andinclusion, and again, it's a
(18:55):
difficult balancing act, Ithink, going back to your point,
you know, if a Law Firm isestablishing itself in a region
within its existing structure,then, you know, it has to be
really clear about why it'sthere, you know. And yes, if
it's really important to hisclients, and it's really
important to that law firm to beable to service those clients
(19:18):
and the kind of work that itcarries out to be in that
region, then it needs to be firmin why it's there. And then, of
course, it needs to balance howthat particular region is seen,
how it's perceived, that youknow, in terms of the West, and
how its staff and clients mayperceive that, and to be really
(19:40):
clear on its communicationaround that. So, you know, it
comes back to having sort ofthese, these firm, wide values,
but but respecting, uh, locallaws, but also making sure that
you know your people are feel assafe as they possibly can within
that particular region. Yeah. Tojust
Rob Bata (20:01):
second, just stepping away for a second from from
these quite complicated anddifficult issues where, which
involves, you know, bothpolitics and human rights and so
forth. And Murray, I think youhave a lot to say on the subject
too, the global versus local.
And I'm talking more aboutculture. Can you address that a
little bit, and how that wouldbe, how that would be handled
(20:27):
when you're when you're dealingwith a with a very large and
international firm, and, and,and what is the ideal
Unknown (20:39):
policy? Policy is getting set sort of centrally,
but it has to, it has toresonate locally. So what do you
what? How are you advising yourclients on that? And I have
another question, about the,about the about about growth.
We'll get back to that in aminute.
Gus Sellitto (20:55):
So I think, I think a law firm will have you
know global values, about howit's it behaves as a law firm
and it respects the local lawsof a jurisdiction it's in. And I
(21:16):
think that that those two don'tnecessarily need to conflict so
respecting the local laws of acountry while treating your
people in a certain way andrespecting their rights and
their diversity and havingprinciples that you adhere to as
a firm, I think they can standtogether. Of course, there are
(21:40):
gray areas within that. And thenat a local level, I think the
way that those local officesinteract with their clients and
their staff, they have to takethose principles of the firm as
a whole, but apply them locally,in line with the local laws and
(22:02):
customs and the respect for forthose local laws and customs. So
again, I think it's a difficultbalancing act, but the two don't
necessarily need to conflict.
Unknown (22:14):
Do you? Do you see a need for local representation on
the reputation management sidefor for these organizations that
are that are growing into newjurisdictions. So they might,
thus, they might be working withyou at an enterprise wide level,
(22:35):
and then they're going into ajurisdiction. How do you
counsel? How they're going tolocalize that. Are you hiring
people on the ground there? Isit a partnership? What? What
happens then?
Gus Sellitto (22:47):
Yeah, I think, I think where you again, you know,
if you think about corporatecommunications of a global law
firm, they'll, they'll, youknow, they'll tend to be set in
London or New York. And I thinkthat coordination is, is really,
really important when you havesort of local, local on the
ground representation, it can bereally, really help, helpful to
(23:08):
deal with some of those nuances,some of those cultural nuances,
having a real feel for the localcultural how the local media
reports issues, and Making surethat there's a really constant
feedback mechanism between thecentral PR team and the local PR
teams, and again, making surethat what is said at a firm wide
(23:30):
global level. How does that fit?
How does that filter down tolocal offices? You know, there's
there's there's there. Is oftenthis sort of perception that
sort of local offices can be alaw onto themselves, and I'll be
interested to hear your viewson, you know, how, how you
manage that perception, is it,is it correct having local
people on the ground, as long asthere's a really strong
(23:53):
centralization of thatcommunication and the feedback
mechanism is really, reallytight, and there is a knowledge
and understanding of what'sgoing on in those local offices
and the kind of advice that'sbeing sought locally, and how
that chimes and connects back tothat kind of central
communications. I think isreally, really important.
Unknown (24:15):
We think
Rob Bata (24:17):
understanding local cultures is very important. And
of course, you can't, you can'tdo that centrally. And it's also
difficult for, I think, even fora reputation management
consulting firm that is heavilyinvolved in in projecting and
(24:38):
helping the firm project acertain image and a certain
culture and so forth. It's hardto do that on a country by
country basis. I'll give you oneexample of a lesson that I
learned at some point in mycareer. I set up and ran offices
throughout Eastern Europe for aChicago Law Firm. And one
(25:03):
summer, the American holiday,the Fourth of July, came around,
and I had announced that we'regoing to close all the offices
and to give everybody a day off.
And in Prague, where I wasbased, at the time, I said to my
I sat around a note to my 30 orso lawyers and staff, saying,
I'd like you to come to our homefor American style Fourth of
(25:31):
July. We'll have a backyardbarbecue, bring your families
and so on and so forth. Nevergot a response, and Fourth of
July was approaching quickly.
And finally, I said to one ofthe partners, so what's going on
here? I know that Czech peopleare a little bit shy sometimes,
and so forth, and I know how todeal with that, but how come no
(25:55):
one's accepting this? And theysaid, Well, you don't understand
for them to go to your house, itmeans it's a work day, and if
the day is supposed to be off,then they don't understand how
they should be off, but at thesame time be working. Now that
(26:15):
would never have been an issueor a question in America, but I
didn't think that through. Ijust thought, Well, gee, this
would be really fun andinteresting for people. And of
course, we'd love to have themover, and, you know, bring your
babies and, you know, hangaround in the backyard, and
we'll have some, you know, hotdogs and hamburgers and so no
(26:36):
one came,
Unknown (26:39):
although Rob, I will tell you, if you, if you're
working with this generationthat's coming up right now in
even in the US, they would say,No, you know what? Thanks, boss.
But if it's a day off, it's aday off.
Rob Bata (26:53):
So, so Gus, you, you do have, you do have an
operation. And I reluctant tocharacterize in a specific way,
because you will tell me exactlywhat that is, but well, you, you
do have an alliance with, withfirms, with the reputation
(27:16):
management firms in Europe, andwhich, which really do deal with
some of these, I think some ofthese more cultural type of
issues.
Gus Sellitto (27:27):
Yeah, not just cultural. I think the morovia
network. Morovia is now in inmany of the European countries,
but also Singapore and India.
And the whole reason for moroviawas because, you know, law firms
are expanding internationally oralready in European
(27:47):
jurisdictions, so where you havea law firm that needs local
language in country, PR support,whether it's from a profile
raising or defensive reputationmanagement perspective, having
experts in those jurisdictionsthat understand all of the
issues we've been discussing,the cultural nuances, the media,
the media environment, howthings are reported, how the
(28:10):
market is developing, what arethe key trends taking place?
From a business perspective, aregulatory perspective, all of
those things are reallyimportant to a law firm in terms
of its global operations, andmaking a success of those global
operations, and therefore havingpeople on the ground and
agencies on the ground that wecan work with on joint and
(28:31):
campaigns, joint initiatives, orindeed, it may just be a very
local issue that needs to bedealt with. Being able to offer
that to our clients has beensomething that has been really
important, and we continue todevelop that, that that work
globally, in those countrieswhere clients have have the most
need, I think coming back alsoto litigation and crisis and
(28:54):
class actions, a lot of theseactions and A lot of cross
border litigation now alsorequires in countries this
support on the ground, and beingable to coordinate that from
London or from Germany orwherever it might be, and having
a number of different agencypartners who you work with well
on those issues is a realadvantage. We're finding.
Rob Bata (29:21):
Yeah, I think it's become essential, actually, to
have that, that ability. And ofcourse, it's clearly not just
about culture, but, but, butthat ability also does address
culture and local customs and soforth, and and I think that's
key now, sorry, Murray, goahead,
Unknown (29:38):
and this was my question. It kind of all ties
back into itself. You're we'reseeing, you know, as firms are
growing into otherjurisdictions, Gus is your
experience that you're gettingcalled in earlier in the
strategic discussions about thegrowth into a jurisdiction. Are
the firms, uh, taking a more.
More proactive, like you'revery, very proactive, and
(30:01):
integrated thinking aboutreputation along with their
strategic growth. So rather thansaying we're going to move into
X jurisdiction, oh, let's callGus and see what's up with that.
Is it? Hey, let's call Gus andtalk about our thoughts. We're
going to be moving into thesejurisdictions. We're thinking
about moving into thesejurisdictions. Let's talk to us
(30:22):
about the reputation management,the way we would approach that
particular market. So is it? Arewe? Are we? Are we finding them
thinking about it moreintegrated? My sense from doing
this for a long time is thatfirms would make the decision
and then and then, and then,sort of bring in, you know,
bring in the otherconsiderations, and sort of
(30:42):
hammer everything into place.
May not work, may not be theright way to do it, but that's
what they were doing. I feellike there's a change, but you
obviously are seeing thisfirsthand. I do
Gus Sellitto (30:55):
think there's a change. Murray, I don't think
you know our advice is going toimpact whether a firm opens
there or not? I think thatdecision is pretty advanced,
right? But we are being calledin much sooner rather than, Oh,
we're now here. Can you help uswith some proactive PR and you
know, we're going to be dealingwith a few issues along the way.
So what we want you, we want youto be able to advise there
(31:18):
that's changed. We have clientswho are who are opening in the
Middle East, but they'rebringing us in a lot earlier to
discuss a lot of the issueswe've talked about. The you
know, how that opening mightimpact them on a global level,
reputationally, how to deal withthe local markets, the local
media. You know, is there apartner that we we could be
(31:40):
speaking to the to on theirbehalf, to then help them on a
local level. So I think yes,absolutely we are. There is more
thought going into that inrelation to, okay, this is a
jurisdiction we're going to, aregion we're going to we may
have some issues around the sortof the reputation that we need
(32:02):
to address. But also, then, froma business development and
marketing and BD perspective,how can PR support that locally?
And having that on the groundsPR support in local language can
be really, really helpful and animportant part of the overall
strategy in how that firmdevelops a presence in that
(32:23):
region and jurisdiction. Andit's, it's really interesting
advice to be giving, becauseyou're, you know, you're coming
in as an agency that's kind ofgot the global perspective, but
then you're collaborating with alocal specialist. And I think
that kind of joint approachgives the gives that, that that
(32:44):
perspective that the client islooking for and the client
needs.
Rob Bata (32:50):
Yeah, I think that's, that's, that's very helpful.
It's, it's interesting where youtalk about bringing in your
expertise sooner than before,that that that I think has been
true for outside consultantsgenerally, I find in in my
business, where I was, when Istarted out this consultancy,
(33:19):
there was Usually some decisionabout we should be doing
something in X jurisdiction, andthen they'd say, Well, do you
think you can help us with that?
I now find myself being askedabout, well, what do you think
would be an interesting or animportant jurisdiction for us,
or should we do anything at all?
(33:42):
And it's, it's just the thetiming has shifted, and I think
it's going to, it's, it's, it'sgoing to kind of continue to
constrict the timeline even morein the future. I think, I think
outside consultants bring aperspective, as you and I know,
(34:03):
as all three of us know, thatis, you know, it's just, it's
just a simple idea of having anextra pair of eyes, and also of
having an objective perspective,but also One that's an objective
perspective that's designed topromote the the interests of the
(34:24):
client that where you come inalready with the attitude, I
want to make sure that theadvice that I provide makes
commercial sense and makescultural sense and political
sense, and will ultimatelyresult in something that's, we
can call a success. And sothat's, it seems. It seems very
(34:48):
simple to summarize it likethat, but, but ultimately,
that's what it's all about.
There's one of we've we've goneon for a bit and, and I really
appreciate. The time that you'retaking, and I think we should be
winding down a little bit, but Ido want to raise one other
thing, which is we talked alittle about this in preparation
US UK, more and more firms inthe UK are interested now,
(35:13):
especially after a and l Shermanin what is still the world's
largest economy, the US. It's myperception that the other so
called Magic Circle firms havenot done a fantastic job of
getting themselves known andrecognized and understood in the
(35:34):
US the way they have elsewherein the globe. I think Anna
Sherman will will change that.
Many years ago, UK firms, andcertainly European firms, are
very reluctant to go into the USbecause of fears clients, fears
about them being a verylitigious kind of environment.
(35:55):
That's no longer the case. Andof course, many law firms now,
in fact, thrive on theirdisputes practices and and, and
for that too, the US is veryimportant. Is it? Is it your
perception, that the interest inthe you us from where you sit in
the UK and from, from yourclients perspective, that the
(36:19):
interest in the US will willcontinue to grow. And ways of
getting into that market andgrowing into in that market will
will continue to grow. Or do youthink that again, from sitting
from where you are, I may have adifferent perspective. There's
now what you might call a sortof a saturation point that UK
(36:40):
firms have done everything thatthey can do to be in the US, and
not much to do beyond that.
Gus Sellitto (36:47):
No, I think the US remains a very important market
for UK law firms, and there is akeen eye on how to penetrate
that market effectively. You'reabsolutely right. We've, we've
seen lots of examples of largeUK law firms, not not making it
in the US. I think an obviouspoint is just such a big market,
and there's almost a shockelement when you get there, as
(37:09):
to how big the market is, andtherefore how difficult it is to
penetrate that market.
Effectively. I think the anoSherman merger is a seminal
moment for other firms lookingat transatlantic deals and
making them work. It wasinteresting. Murray, in our in
our prep for this, you said thatthere's been some really good PR
(37:29):
around that merger, but nowthere are a few question marks
coming, and that's inevitable,you know, that's in terms of how
is it going to work in practice?
Now that you know, we've gotthis in place. What are the
mechanics going to look like?
What's the culture going to looklike? But in terms of a deal, I
do think it's a seminal momentfor a transatlantic merger of
that size. And I think other bigUK law firms will be looking at
(37:55):
that very closely, and US lawfirms in relation to making a
success of that kind oftransAtlantic merger. It's
really interesting. Youmentioned the Magic Circle,
Robert world, where there's thiswhole question mark, does the
magic circle exist in the right
Rob Bata (38:11):
so I put it in quotes.
Gus Sellitto (38:15):
That's a really interesting conversation for us
to have. I think if we look atthe magic circle, and they look
at the success that the US lawfirms have had in London, then
that also is a signal of needingto have a really strong presence
in the US, because there are anumber of big US law firms, as
you know, who have made a realsuccess in the London market.
(38:38):
And when it comes toremuneration and pay for
trainees. And in the privateequity space, for example, where
they've been able to pay rainmakers huge amounts of money to
switch from a magic circle lawfirm to a US law firm. Then
there is a threat there. There'sa potential threat there. And so
(39:00):
I think the UK magic circle lawfirms and other large law firms
are looking at the ano Shermandeal and how it will work in
practice. Very, very closely.
I'd be really interested tohear, as an expert, Robert,
whether you think we're going tosee similar, similar
announcements in the next 24months,
Rob Bata (39:22):
we will and I can say that with a good deal of
confidence. I think theinteresting thing, and O Sherman
may nevertheless remain a kindof an outlier, for one important
reason which also had in thepast held back US UK or UK firms
(39:45):
expanding in the States, whichis the financial disconnect, the
profitability, the revenue perlawyer, even the hours per
lawyer, are very. Difficult tomatch when you've got law firms
here and say that the top 50 ofthe am law 100 by and large,
(40:13):
most of them being moreprofitable than most UK firms on
a whether it's whether it'srevenue per lawyer, whether it's
profits per lawyer, whether it'sprofits per equity partner,
which is very often a misleadingstatistic, having the financial
(40:35):
match, I think, is is difficult.
So I think I think what you'remore likely to see is mergers
with not necessarily with peers.
If you've got say, top 10 UKfirms and their peers, in terms
(40:57):
of what they do and theirreputation and so forth, are
basically the Wall Street firms.
They're not financial peers.
Sherman was, as I think we allknow and and it's been pretty
clear in the press too, theywere having a difficulty. I
won't call it a rescue, but, butthey definitely reached the
(41:18):
point where they could aligntheir profitability with with
ano reasonably well. I don'tthink you're going to see that
with other Wall Street firms onunless there's something I'm
missing. So I think it'll bemore creative approaches than
(41:40):
simply that kind of peer to peertype of approach. I think it
might, it might focus onparticular practice strengths or
particular regions at least, atleast as an initial or as a
developing strategy
Unknown (41:58):
that emerging, maybe with a super, super regional
firm in the US, yeah, perhaps,
Rob Bata (42:03):
yeah. Perhaps it's those. Those kinds of, those
kinds of possibilities are verymuch alive and open. And I think
there is a better chance ofhaving the financial fit and
and, and not having to do atremendous amount of
reorganization, not to mentioncompensation, difficult
(42:27):
compensation questions when itcomes to aligning the firm
globally. But But definitely, myperspective is, and I agree with
you guys, so you know this, thisprocess will continue. You can't
write off you can't write offthe US and you certainly you
need to be there. I think it'sinteresting that even the very,
(42:51):
very cautious Japanese firms,which certainly will not be
merging with any US firms, buteven they have begun to open
offices in the US and in NewYork and San Francisco and
Chicago, and when you think ofhow conscious they are and and
how conservative they are, itwill tell you that there's that
(43:14):
there's more afoot going on. Idon't see major European firms
coming in or doing a big merger.
I just that's just not in theirDNA, but it's just it's just
very different for these largeUK firms and firms that have a
fantastic global presence butare not really meaningfully
situated in the US so far.
Unknown (43:40):
GMT would like to thank Gus Alito for his time and
wisdom on our podcast until nexttime. Thank you. Bye.
Um, welcome to part two of GMTs conversation with
(00:07):
Byfield founder Gus solito.
Rob Bata (00:12):
So let's so let's go back to to risk management and
PR, or, versus PR, or includingPR, what? What is it you you
talk about how leading law firmsnow all have internal resources,
and what is your process interms of how you deal with with
(00:33):
the internal legal executive,with the internal executive team
and and who are the people thatyou normally work with in terms
of, terms of the services thatyou provide, and how does that
come about?
Gus Sellitto (00:51):
Well, as you know, Robert now, most of the larger
law firms, all of them, willhave in house, PR and marketing
teams, and they're very, veryestablished teams, and very good
at what they what they do, butit's a finite resource, and so
there will always be space androom for external consultants to
come in, who can bring you know,particularly when you look at
(01:12):
reputation management andcrisis, they can bring a sort of
dispassionate view to some ofthe issues that a law firm may
be facing. We can also bring akind of horizon scanning view of
what the rest of the marketdoes. We specialize in the legal
sector, so it's our business tobe looking at what other law
firms are doing, how the marketis developing, what the media is
(01:34):
writing about, where the nextbig legislative change might
happen, and how that's impactingthe reputation of the sector as
a whole, but also individual lawfirms operating globally or
locally. And I think that kindof horizon scanning view and
that dispassionate view when itcomes to crisis and more sticky
(01:56):
reputational issues can be areal benefit for law firms to be
able to bring in that expertise,certainly in terms of what we do
on the more brand, buildingproactive PR sides, again, as I
say, law firms don't you know,teams are much, much larger than
they were a few years ago, butit's a finite resource. So you
may have a project or acampaign, let's say, you know,
(02:20):
insolvencies are up because ofwhere the economy is. You want
to do a big push intoinsolvency, you would perhaps
bring in an external PR agencylike us to help you devise that
campaign to give your internalteam that additional resource
that's required on a project byproject basis. And obviously the
(02:41):
great thing about bringingconsultancies in is you can
flex. You can flex that musclefor peak times, peaks and
troughs of when you're doingprofile raising and campaigns.
And this is across the board. Itcan be marketing consultants. It
clearly applies to what you doas well to what you both do. But
having agencies that reallyunderstand your market, the
(03:05):
industry and the clients you'retrying to reach, I think, can be
very, very valuable. That'scertainly why people that's
certainly why our clients callus in when it comes to crisis
and risk and where law firms arefacing litigation, it's very
good to often take that awayfrom the in house, PR, who's
(03:25):
focusing on the corecommunications and the good
news, you want to try andisolate that incident as much as
possible. And again, thatincident can take a hell of a
lot of headroom up. You know, itcan be all consuming for two
weeks or two months or evenlonger, depending on how big the
issue is, and therefore bringingin external counsel, PR counsel,
(03:46):
whatever the expertise might be,can be very, very useful for
those firms. So we're seeingincreased demand, because law
firms are offering moreservices, more products, more
initiatives. They are wanting toget good brand building PR
around those campaigns. So we'redoing a lot more campaigns.
(04:06):
We're doing a lot more practicearea support that, as I say,
supports a particular marketmovement or an initiative a law
firm is involved in. And then,of course, the crisis in
litigation and risk andreputation management, for all
the things I said earlier aboutthe global environment just
becoming much more in the publicglare, that that leads to a lot
(04:28):
more instructions for us aswell.
Rob Bata (04:31):
And so it I'd like to have your perspective also on
the not quite crisis type ofsituation, but as you say,
market developments and soforth. And especially from my
perspective, what I do is lawfirm mergers, including cross
border ones, and where does whatyou do come into that in terms
(04:58):
of both the messaging. Andperhaps, in some cases, dealing
with what might be some negativeperceptions about a proposed
merger or an actual merger thatis already happening.
Gus Sellitto (05:10):
Well, this is an area that that you know, you and
I would work very, very closelyon Robert the you know, the
whole point around mergercommunications is they are often
leaked at the discussion phase.
And if you're ill prepared ornot prepared for that leak, it's
kind of the genie is out of thebottle. You haven't been able to
prepare messaging around therationale some of the internal
(05:30):
discussions that may be goingon, you know it may mean that
the media gets to know about theproposed discussions before your
internal people even have, havegot to know about this, and that
sets the wrong tone andnarrative from the start. So
communications around merger,talks and discussions, you know,
(05:54):
we know there's a there's a longprocess to them, there's the
discussion, then there's a voteso there is, there is a process
that that needs to be followedand making sure that you're
prepared for any leak scenarios.
While those discussions areongoing, preparing a really
detailed communications pack asto the rationale for the merger,
(06:14):
what it will mean for yourpeople, what it will mean for
your clients, all of that preplanning work needs to go on way
in advance of any potential leakscenario being possible and
prepared for any leak scenario.
And then, of course, you'regoing to get the difficult
questions aroundrationalization. What does this
mean in terms of job securityand all of that needs to be
prepared for to give thosediscussions the best chance to
(06:38):
progress and to ensure that whenthe information does come out,
whether it's leaked or you'veproactively put it out, you're
sending the right message to themarket, internal stakeholders,
external stakeholders, andyou're giving those discussions
the best chance of success. Imean, we talked about that, you
know, obviously the big anoSherman, the way those
(07:02):
communications were handled wereexcellent. In terms of, there
was a microsite that wasprepared. And we were talking
about the big merger recently,Trans Atlantic. The way those
communications were prepared,there was an announcement in the
Financial Times, I think, thaton the Sunday, there was a
microsite ready with a Q and Athere would have been a lot of
(07:24):
background stakeholdercommunications going on in
advance of that, and I thinkthat set the tone for a positive
process to happen. But veryinterested to hear how your
experience being on the advisoryside of the M and A process.
Robert,
Rob Bata (07:42):
well, my experience is very much to reduce it to a
simple sentence. Is a leak isalmost always a death sentence,
if once it gets into the pressat the wrong time without
appropriate management of thesituation, almost invariably,
(08:04):
will result in the merger nottaking place, or enough people
walking away from it that thatit's no good. This is just not
likely to happen. And of course,the longer that a prospective
merger is in the public eye asstill being discussed, the more
(08:24):
likely it is that, one, it wassubject of a leak, and two, that
it's not going to go anywhere.
And then there are a number ofthose, those situations that
that have happened. So I thinkthat's very important. Going
back to the ano Sherman, I thinkone of the you're absolutely
right, that was fantasticallymanaged. And one of the things
that I think I mentioned on thispodcast before, as I understood
(08:46):
it, it was so well prepared thaton that Sunday, or perhaps it
was Saturday, when they decidedto release it, apparently the
small group that was putting allof this together got wind of the
fact that there might be a leak,and so they accelerated the
(09:09):
release of the informationseveral hours earlier. And but,
but we're so well prepared to dothat that they could do it and
and so that that was able todeal with that issue in advance
and very successfully so. But Ifound, if you look at the
example, for example, of thevery unfortunate law firm of
(09:34):
stroke and stricken Levan in theUS, for a couple of years now,
there have been discussions inout in the open, about how
they're seeking a mergerpartner, one after the other.
And every time one was mentionedas a real likelihood or real
possibility, it it just wentaway. And it happened when
(09:54):
Melvin, a Myers, was was. Havinga discussion with a with with a
magic circle firm. It happenedwith a with a number of others.
It's it's very, very difficultto manage a leak unless you're
absolutely prepared, internallyand externally, to either have
(10:18):
an explanation of what leak isabout, or be able truthfully to
deny the subject of the leak. Soit's the those are often, I
think, close to irreparablesituations, but, but leaving
(10:38):
aside the leak side of it, Ithink you're absolutely right
that you do have to prepare themarket, and you have to prepare
the rationale and and that part,I found, is often not always
that well handled. And I canthink of certain examples where
(11:01):
large law firms have expandedinto countries in a way that
really didn't seem to make sensefor a lot of people, other than
to put to put some flags on themap. And I can say this now,
because certainly there was muchof that perception about dentin
(11:22):
so merging up with Da Chang,which was what the real merger.
And of course, now they'vepulled back from all that. But
certainly in the legal market,it never seemed to make sense,
because simply having another10,000 lawyers or 8000 lawyers
distributed all over China. Madeno sense at all, but let's talk
about China for a second. How.
(11:49):
How does one manage, not simplyreputation, but political risk
or security risk where you havea law firm that does business on
the mainland, also doesbusiness, perhaps in Hong Kong,
but there are, in fact, a lot ofgeopolitical tensions. There are
(12:12):
also data security issues, and Iwould mention the Latham and
Watkins, which recentlyannounced that their Hong Kong
staff will no longer have accessto to the internet, essentially
because of worries about Chinesesecurity laws. Is there a way to
(12:35):
handle those kinds of issues andat the same time be able to
forestall a negative reaction, anegative political reaction
from, say, Mainland China.
Gus Sellitto (12:53):
It's a tricky one.
This one. Robert, yeah, yeah, Iknow, yeah. I mean, I'm
interested to get your views.
Rob Bata (13:01):
Yeah. Well, I mean, honestly, my view is that in
sometimes you have to fall backon technicalities, yeah, and
say, well, our operation, well,just, let's stick with China.
Again. I don't just want tosingle them out, but, but let's
stick with China for a minute.
You fall back on thetechnicality that says, well,
(13:21):
the the operating entity that wehave in the country that we are
worried about offending isreally a separate entity, and
it's licensed by the localauthorities, and it has a a an
affiliate or a partner firmthat's that's also mainland
Chinese, and of course, theyhave their own. They are
(13:45):
politically pristine, andtherefore we've taken this step
on that side of the divide, butit really doesn't affect what we
do on the other side of thedivide, because it's there, are
there. It's technically adifferent operation. But I think
(14:06):
it's extremely difficult, and Ithink it's become very difficult
for a number of firms that I'mpersonally aware of, firms that
have been scratching their headsabout how to move forward in
China and on the mainland. Andof course, part of that
calculation is a strict businesscalculation. Most law firms
don't have a very profitablepresence on the mainland in
(14:31):
China, but have been therebecause their clients need them
to be there. They feel that theyneed to be seen there. And
except for those firms that havebeen there for a long, long time
and have developed very, verystrong relationships with the
regulators and and other lawfirms, a China presence is
tricky. And, and, and you'veseen, you've seen. A number of
(14:58):
firms, including last year,pulling up stakes from the
mainland. Then there are otherreasons why some firms have left
Hong Kong too, and that that mayhas a lot to do with the
security environment, but italso has to do with the fact
that there's much less MNA goingon and so forth. I happen to
think that Hong Kong is still avery strong place to be, and I
(15:20):
actually counsel clients withthe appropriate types of
practices that it's a good placeto stay or still to enter,
especially in the sort ofFinTech and crypto areas, but
also in disputes and so forth.
(15:41):
So I'm not writing off Hong Kongat all, but it's a very
different environment, and it'snot the kind of place where you
can expect a lot of M and Aactivity going on and listings,
dual listings, in Hong Kongreally don't pay that much for
law firms to do that. It'sbecome very commoditized. So
(16:02):
that's, that's my perspective.
It's, it's, it's extremelydifficult. You mentioned
earlier, it was very easy forlaw firms to say, well, we're
pulling out of Russia. But ofcourse, that had a lot to do
with the fact that you've got agigantic land war of the sort
that we haven't seen since WorldWar Two, where you've got an
(16:24):
obvious aggressor, and it's veryclear what's what's going on and
why US firms can no longer readit, not to mention, of course,
actual Danger, physical danger,to to Western lawyers practicing
in Russia, it's very differentwhere you're simply where you're
(16:46):
simply confronting a verydifferent and perhaps
adversarial entity, but withwhich you're not really in
active conflict other than kindof Commercial and in terms of
trade wars, and so China reallyrepresents that in between is
the Saudi situation, where SaudiArabia, of course, has a
(17:09):
reputation that doesn't fly verywell with the West And and for
for obvious reasons, but wherealso access, access to that
market, and access to the MiddleEast and the Gulf states
generally, has been very, very,very important for law firms and
(17:31):
their clients. So it's, it's,it's a somewhat different
calculus, and it seems to methat so far, there hasn't been
that much backlash against whathas been a spate of US and UK
law firms opening in SaudiArabia, in Riyadh. I mean,
that's it's now well over adozen that have opened since the
(17:53):
since the liberalization of theregulations in Saudi Arabia. But
I suspect that even for thosewho have have done the work and
have opened offices there and soforth, that they've, they've,
they've had some access to to ato reputation management and
(18:13):
this, we're not talking hereabout identifying any clients or
anything like that. But I wouldassume that you would agree that
in going into a place like SaudiArabia, you would definitely
want to manage your publicrelations and your reputation in
advance.
Gus Sellitto (18:33):
Absolutely, Robert and there have been a there's
been a rush to Riyadh and Saudiand there have been articles
that have questioned a law firmpositioning in that region, vis
a vis its kind of global valuesand its global statements around
human rights and diversity andinclusion, and again, it's a
(18:55):
difficult balancing act, Ithink, going back to your point,
you know, if a Law Firm isestablishing itself in a region
within its existing structure,then, you know, it has to be
really clear about why it'sthere, you know. And yes, if
it's really important to hisclients, and it's really
important to that law firm to beable to service those clients
(19:18):
and the kind of work that itcarries out to be in that
region, then it needs to be firmin why it's there. And then, of
course, it needs to balance howthat particular region is seen,
how it's perceived, that youknow, in terms of the West, and
how its staff and clients mayperceive that, and to be really
(19:40):
clear on its communicationaround that. So, you know, it
comes back to having sort ofthese, these firm, wide values,
but but respecting, uh, locallaws, but also making sure that
you know your people are feel assafe as they possibly can within
that particular region. Yeah. Tojust
Rob Bata (20:01):
second, just stepping away for a second from from
these quite complicated anddifficult issues where, which
involves, you know, bothpolitics and human rights and so
forth. And Murray, I think youhave a lot to say on the subject
too, the global versus local.
And I'm talking more aboutculture. Can you address that a
little bit, and how that wouldbe, how that would be handled
(20:27):
when you're when you're dealingwith a with a very large and
international firm, and, and,and what is the ideal
Unknown (20:39):
policy? Policy is getting set sort of centrally,
but it has to, it has toresonate locally. So what do you
what? How are you advising yourclients on that? And I have
another question, about the,about the about about growth.
We'll get back to that in aminute.
Gus Sellitto (20:55):
So I think, I think a law firm will have you
know global values, about howit's it behaves as a law firm
and it respects the local lawsof a jurisdiction it's in. And I
(21:16):
think that that those two don'tnecessarily need to conflict so
respecting the local laws of acountry while treating your
people in a certain way andrespecting their rights and
their diversity and havingprinciples that you adhere to as
a firm, I think they can standtogether. Of course, there are
(21:40):
gray areas within that. And thenat a local level, I think the
way that those local officesinteract with their clients and
their staff, they have to takethose principles of the firm as
a whole, but apply them locally,in line with the local laws and
(22:02):
customs and the respect for forthose local laws and customs. So
again, I think it's a difficultbalancing act, but the two don't
necessarily need to conflict.
Unknown (22:14):
Do you? Do you see a need for local representation on
the reputation management sidefor for these organizations that
are that are growing into newjurisdictions. So they might,
thus, they might be working withyou at an enterprise wide level,
(22:35):
and then they're going into ajurisdiction. How do you
counsel? How they're going tolocalize that. Are you hiring
people on the ground there? Isit a partnership? What? What
happens then?
Gus Sellitto (22:47):
Yeah, I think, I think where you again, you know,
if you think about corporatecommunications of a global law
firm, they'll, they'll, youknow, they'll tend to be set in
London or New York. And I thinkthat coordination is, is really,
really important when you havesort of local, local on the
ground representation, it can bereally, really help, helpful to
(23:08):
deal with some of those nuances,some of those cultural nuances,
having a real feel for the localcultural how the local media
reports issues, and Making surethat there's a really constant
feedback mechanism between thecentral PR team and the local PR
teams, and again, making surethat what is said at a firm wide
(23:30):
global level. How does that fit?
How does that filter down tolocal offices? You know, there's
there's there's there. Is oftenthis sort of perception that
sort of local offices can be alaw onto themselves, and I'll be
interested to hear your viewson, you know, how, how you
manage that perception, is it,is it correct having local
people on the ground, as long asthere's a really strong
(23:53):
centralization of thatcommunication and the feedback
mechanism is really, reallytight, and there is a knowledge
and understanding of what'sgoing on in those local offices
and the kind of advice that'sbeing sought locally, and how
that chimes and connects back tothat kind of central
communications. I think isreally, really important.
Unknown (24:15):
We think
Rob Bata (24:17):
understanding local cultures is very important. And
of course, you can't, you can'tdo that centrally. And it's also
difficult for, I think, even fora reputation management
consulting firm that is heavilyinvolved in in projecting and
(24:38):
helping the firm project acertain image and a certain
culture and so forth. It's hardto do that on a country by
country basis. I'll give you oneexample of a lesson that I
learned at some point in mycareer. I set up and ran offices
throughout Eastern Europe for aChicago Law Firm. And one
(25:03):
summer, the American holiday,the Fourth of July, came around,
and I had announced that we'regoing to close all the offices
and to give everybody a day off.
And in Prague, where I wasbased, at the time, I said to my
I sat around a note to my 30 orso lawyers and staff, saying,
I'd like you to come to our homefor American style Fourth of
(25:31):
July. We'll have a backyardbarbecue, bring your families
and so on and so forth. Nevergot a response, and Fourth of
July was approaching quickly.
And finally, I said to one ofthe partners, so what's going on
here? I know that Czech peopleare a little bit shy sometimes,
and so forth, and I know how todeal with that, but how come no
(25:55):
one's accepting this? And theysaid, Well, you don't understand
for them to go to your house, itmeans it's a work day, and if
the day is supposed to be off,then they don't understand how
they should be off, but at thesame time be working. Now that
(26:15):
would never have been an issueor a question in America, but I
didn't think that through. Ijust thought, Well, gee, this
would be really fun andinteresting for people. And of
course, we'd love to have themover, and, you know, bring your
babies and, you know, hangaround in the backyard, and
we'll have some, you know, hotdogs and hamburgers and so no
(26:36):
one came,
Unknown (26:39):
although Rob, I will tell you, if you, if you're
working with this generationthat's coming up right now in
even in the US, they would say,No, you know what? Thanks, boss.
But if it's a day off, it's aday off.
Rob Bata (26:53):
So, so Gus, you, you do have, you do have an
operation. And I reluctant tocharacterize in a specific way,
because you will tell me exactlywhat that is, but well, you, you
do have an alliance with, withfirms, with the reputation
(27:16):
management firms in Europe, andwhich, which really do deal with
some of these, I think some ofthese more cultural type of
issues.
Gus Sellitto (27:27):
Yeah, not just cultural. I think the morovia
network. Morovia is now in inmany of the European countries,
but also Singapore and India.
And the whole reason for moroviawas because, you know, law firms
are expanding internationally oralready in European
(27:47):
jurisdictions, so where you havea law firm that needs local
language in country, PR support,whether it's from a profile
raising or defensive reputationmanagement perspective, having
experts in those jurisdictionsthat understand all of the
issues we've been discussing,the cultural nuances, the media,
the media environment, howthings are reported, how the
(28:10):
market is developing, what arethe key trends taking place?
From a business perspective, aregulatory perspective, all of
those things are reallyimportant to a law firm in terms
of its global operations, andmaking a success of those global
operations, and therefore havingpeople on the ground and
agencies on the ground that wecan work with on joint and
(28:31):
campaigns, joint initiatives, orindeed, it may just be a very
local issue that needs to bedealt with. Being able to offer
that to our clients has beensomething that has been really
important, and we continue todevelop that, that that work
globally, in those countrieswhere clients have have the most
need, I think coming back alsoto litigation and crisis and
(28:54):
class actions, a lot of theseactions and A lot of cross
border litigation now alsorequires in countries this
support on the ground, and beingable to coordinate that from
London or from Germany orwherever it might be, and having
a number of different agencypartners who you work with well
on those issues is a realadvantage. We're finding.
Rob Bata (29:21):
Yeah, I think it's become essential, actually, to
have that, that ability. And ofcourse, it's clearly not just
about culture, but, but, butthat ability also does address
culture and local customs and soforth, and and I think that's
key now, sorry, Murray, goahead,
Unknown (29:38):
and this was my question. It kind of all ties
back into itself. You're we'reseeing, you know, as firms are
growing into otherjurisdictions, Gus is your
experience that you're gettingcalled in earlier in the
strategic discussions about thegrowth into a jurisdiction. Are
the firms, uh, taking a more.
More proactive, like you'revery, very proactive, and
(30:01):
integrated thinking aboutreputation along with their
strategic growth. So rather thansaying we're going to move into
X jurisdiction, oh, let's callGus and see what's up with that.
Is it? Hey, let's call Gus andtalk about our thoughts. We're
going to be moving into thesejurisdictions. We're thinking
about moving into thesejurisdictions. Let's talk to us
(30:22):
about the reputation management,the way we would approach that
particular market. So is it? Arewe? Are we? Are we finding them
thinking about it moreintegrated? My sense from doing
this for a long time is thatfirms would make the decision
and then and then, and then,sort of bring in, you know,
bring in the otherconsiderations, and sort of
(30:42):
hammer everything into place.
May not work, may not be theright way to do it, but that's
what they were doing. I feellike there's a change, but you
obviously are seeing thisfirsthand. I do
Gus Sellitto (30:55):
think there's a change. Murray, I don't think
you know our advice is going toimpact whether a firm opens
there or not? I think thatdecision is pretty advanced,
right? But we are being calledin much sooner rather than, Oh,
we're now here. Can you help uswith some proactive PR and you
know, we're going to be dealingwith a few issues along the way.
So what we want you, we want youto be able to advise there
(31:18):
that's changed. We have clientswho are who are opening in the
Middle East, but they'rebringing us in a lot earlier to
discuss a lot of the issueswe've talked about. The you
know, how that opening mightimpact them on a global level,
reputationally, how to deal withthe local markets, the local
media. You know, is there apartner that we we could be
(31:40):
speaking to the to on theirbehalf, to then help them on a
local level. So I think yes,absolutely we are. There is more
thought going into that inrelation to, okay, this is a
jurisdiction we're going to, aregion we're going to we may
have some issues around the sortof the reputation that we need
(32:02):
to address. But also, then, froma business development and
marketing and BD perspective,how can PR support that locally?
And having that on the groundsPR support in local language can
be really, really helpful and animportant part of the overall
strategy in how that firmdevelops a presence in that
(32:23):
region and jurisdiction. Andit's, it's really interesting
advice to be giving, becauseyou're, you know, you're coming
in as an agency that's kind ofgot the global perspective, but
then you're collaborating with alocal specialist. And I think
that kind of joint approachgives the gives that, that that
(32:44):
perspective that the client islooking for and the client
needs.
Rob Bata (32:50):
Yeah, I think that's, that's, that's very helpful.
It's, it's interesting where youtalk about bringing in your
expertise sooner than before,that that that I think has been
true for outside consultantsgenerally, I find in in my
business, where I was, when Istarted out this consultancy,
(33:19):
there was Usually some decisionabout we should be doing
something in X jurisdiction, andthen they'd say, Well, do you
think you can help us with that?
I now find myself being askedabout, well, what do you think
would be an interesting or animportant jurisdiction for us,
or should we do anything at all?
(33:42):
And it's, it's just the thetiming has shifted, and I think
it's going to, it's, it's, it'sgoing to kind of continue to
constrict the timeline even morein the future. I think, I think
outside consultants bring aperspective, as you and I know,
(34:03):
as all three of us know, thatis, you know, it's just, it's
just a simple idea of having anextra pair of eyes, and also of
having an objective perspective,but also One that's an objective
perspective that's designed topromote the the interests of the
(34:24):
client that where you come inalready with the attitude, I
want to make sure that theadvice that I provide makes
commercial sense and makescultural sense and political
sense, and will ultimatelyresult in something that's, we
can call a success. And sothat's, it seems. It seems very
(34:48):
simple to summarize it likethat, but, but ultimately,
that's what it's all about.
There's one of we've we've goneon for a bit and, and I really
appreciate. The time that you'retaking, and I think we should be
winding down a little bit, but Ido want to raise one other
thing, which is we talked alittle about this in preparation
US UK, more and more firms inthe UK are interested now,
(35:13):
especially after a and l Shermanin what is still the world's
largest economy, the US. It's myperception that the other so
called Magic Circle firms havenot done a fantastic job of
getting themselves known andrecognized and understood in the
(35:34):
US the way they have elsewherein the globe. I think Anna
Sherman will will change that.
Many years ago, UK firms, andcertainly European firms, are
very reluctant to go into the USbecause of fears clients, fears
about them being a verylitigious kind of environment.
(35:55):
That's no longer the case. Andof course, many law firms now,
in fact, thrive on theirdisputes practices and and, and
for that too, the US is veryimportant. Is it? Is it your
perception, that the interest inthe you us from where you sit in
the UK and from, from yourclients perspective, that the
(36:19):
interest in the US will willcontinue to grow. And ways of
getting into that market andgrowing into in that market will
will continue to grow. Or do youthink that again, from sitting
from where you are, I may have adifferent perspective. There's
now what you might call a sortof a saturation point that UK
(36:40):
firms have done everything thatthey can do to be in the US, and
not much to do beyond that.
Gus Sellitto (36:47):
No, I think the US remains a very important market
for UK law firms, and there is akeen eye on how to penetrate
that market effectively. You'reabsolutely right. We've, we've
seen lots of examples of largeUK law firms, not not making it
in the US. I think an obviouspoint is just such a big market,
and there's almost a shockelement when you get there, as
(37:09):
to how big the market is, andtherefore how difficult it is to
penetrate that market.
Effectively. I think the anoSherman merger is a seminal
moment for other firms lookingat transatlantic deals and
making them work. It wasinteresting. Murray, in our in
our prep for this, you said thatthere's been some really good PR
(37:29):
around that merger, but nowthere are a few question marks
coming, and that's inevitable,you know, that's in terms of how
is it going to work in practice?
Now that you know, we've gotthis in place. What are the
mechanics going to look like?
What's the culture going to looklike? But in terms of a deal, I
do think it's a seminal momentfor a transatlantic merger of
that size. And I think other bigUK law firms will be looking at
(37:55):
that very closely, and US lawfirms in relation to making a
success of that kind oftransAtlantic merger. It's
really interesting. Youmentioned the Magic Circle,
Robert world, where there's thiswhole question mark, does the
magic circle exist in the right
Rob Bata (38:11):
so I put it in quotes.
Gus Sellitto (38:15):
That's a really interesting conversation for us
to have. I think if we look atthe magic circle, and they look
at the success that the US lawfirms have had in London, then
that also is a signal of needingto have a really strong presence
in the US, because there are anumber of big US law firms, as
you know, who have made a realsuccess in the London market.
(38:38):
And when it comes toremuneration and pay for
trainees. And in the privateequity space, for example, where
they've been able to pay rainmakers huge amounts of money to
switch from a magic circle lawfirm to a US law firm. Then
there is a threat there. There'sa potential threat there. And so
(39:00):
I think the UK magic circle lawfirms and other large law firms
are looking at the ano Shermandeal and how it will work in
practice. Very, very closely.
I'd be really interested tohear, as an expert, Robert,
whether you think we're going tosee similar, similar
announcements in the next 24months,
Rob Bata (39:22):
we will and I can say that with a good deal of
confidence. I think theinteresting thing, and O Sherman
may nevertheless remain a kindof an outlier, for one important
reason which also had in thepast held back US UK or UK firms
(39:45):
expanding in the States, whichis the financial disconnect, the
profitability, the revenue perlawyer, even the hours per
lawyer, are very. Difficult tomatch when you've got law firms
here and say that the top 50 ofthe am law 100 by and large,
(40:13):
most of them being moreprofitable than most UK firms on
a whether it's whether it'srevenue per lawyer, whether it's
profits per lawyer, whether it'sprofits per equity partner,
which is very often a misleadingstatistic, having the financial
(40:35):
match, I think, is is difficult.
So I think I think what you'remore likely to see is mergers
with not necessarily with peers.
If you've got say, top 10 UKfirms and their peers, in terms
(40:57):
of what they do and theirreputation and so forth, are
basically the Wall Street firms.
They're not financial peers.
Sherman was, as I think we allknow and and it's been pretty
clear in the press too, theywere having a difficulty. I
won't call it a rescue, but, butthey definitely reached the
(41:18):
point where they could aligntheir profitability with with
ano reasonably well. I don'tthink you're going to see that
with other Wall Street firms onunless there's something I'm
missing. So I think it'll bemore creative approaches than
(41:40):
simply that kind of peer to peertype of approach. I think it
might, it might focus onparticular practice strengths or
particular regions at least, atleast as an initial or as a
developing strategy
Unknown (41:58):
that emerging, maybe with a super, super regional
firm in the US, yeah, perhaps,
Rob Bata (42:03):
yeah. Perhaps it's those. Those kinds of, those
kinds of possibilities are verymuch alive and open. And I think
there is a better chance ofhaving the financial fit and
and, and not having to do atremendous amount of
reorganization, not to mentioncompensation, difficult
(42:27):
compensation questions when itcomes to aligning the firm
globally. But But definitely, myperspective is, and I agree with
you guys, so you know this, thisprocess will continue. You can't
write off you can't write offthe US and you certainly you
need to be there. I think it'sinteresting that even the very,
(42:51):
very cautious Japanese firms,which certainly will not be
merging with any US firms, buteven they have begun to open
offices in the US and in NewYork and San Francisco and
Chicago, and when you think ofhow conscious they are and and
how conservative they are, itwill tell you that there's that
(43:14):
there's more afoot going on. Idon't see major European firms
coming in or doing a big merger.
I just that's just not in theirDNA, but it's just it's just
very different for these largeUK firms and firms that have a
fantastic global presence butare not really meaningfully
situated in the US so far.
Unknown (43:40):
GMT would like to thank Gus Alito for his time and
wisdom on our podcast until nexttime. Thank you. Bye.
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