How Global is Globalization?

By: Walker Clark, LLC

Provided by World Services Group


How Global is Globalization?

   Published August 9, 2006 - Florida, USA

There is a lot of talk about globalization of the legal profession; but how far has globalization reached into law firms worldwide?

Respondents to a Walker Clark on-line survey in May and June 2006 reported that a significant part of their law firms' business involved international clients. More than 60% of the 917 respondents said that their law firm had provided legal services within the past two years to local clients who do business or invest in a foreign country. 44% reported that their firms had provided legal services to a foreign client during that same period.

We asked about contact with international clients defined in two ways: (1) the local client with business interests or investments in another country; and (2) the foreign client. Services to international clients -- whether local or foreign -- appear to be provided by a relatively small, but nonetheless significant, group of partners. Slightly less than 18% of the respondents said that they had personally provided services to a foreign client. Nonetheless, in a profession that has traditionally been restricted to geographic jurisdictions, this result is evidence of a significant cadre of international practitioners in the profession.

The survey results also suggest a significant variation by location and by firm size. Large firms reported more contact with international clients and smaller firms reported substantially less. Nonetheless, there was a significant presence of international clients in even the smallest law firms (1 to 20 lawyers).

Although by far the largest regional group in the survey, U.S. firms and lawyers reported substantially less contact with international clients than did law firms in other regions.

Who responded?
This survey was conducted between 8 May 2006 and 7 June 2006 by inviting visitors to www.walkerclark.com to click a link on the home page. 917 respondents participated in the survey before its closing date.

Three-fifths of the respondents were from law firms with 50 or fewer lawyers. The results displayed a significant diversity by firm size, while not necessarily representative globally or by region.

Respondents from every region completed the survey, although the United States and the United Kingdom contributed slightly more than half of the sample.

Almost half (48.71%) of the respondents were partners in law firms. 19.13% were associates. The survey also attracted a substantial number of respondents (75) who described themselves in senior management positions typically held by non-lawyers, such as Chief Executive, Executive Director, Human Resources Manager, Finance Director, and Marketing Director.

Law firm size
The results establish that, at a general proposition, international clients tend to go to larger law firms. However, the results also suggest that smaller firms have captured a significant amount of the work from international businesses. We were unable to verify the nature of the practice of lawyers from smaller firms who answered "yes;" but our experience and knowledge of legal markets lead Walker Clark analysts to hypothesize, but not necessarily conclude, that many or most of these respondents were in specialized or boutique practices such as intellectual property or tax.

Regional differences
We had sufficiently large responses from several regions to permit evaluation of regional differences in the impact of globalization on individual lawyers' client bases. The exceptions were regions that contributed fewer than 20 responses: Africa, Australia / New Zealand, and Middle East.
Lawyers in the United States have the "least international" client portfolios.

The data also suggest a significant difference between the firm's experience with international practice and those of individual respondents. In other words, experience with international clients tends to be concentrated among relatively few lawyers.

The one region that appears to be relatively detached from the international legal market is the United States. A very high percentage of respondents from large firms in the United States report having served international clients in each category (i.e., the local client with international business interests and the foreign client). the presence of international clients dropped very sharply among midsize and small U.S. law firms.

Conclusions
How global is globalization? The survey results suggest that globalization, as evidenced by local clients with international business interests and by foreign clients, is more extensive and has permeated more deeply into the legal profession than we originally supposed. International clients, both within the jurisdiction and from outside, do not limit themselves to the large, more prominent firms. Even in firms with fewer than 20 lawyers, a significant number of clients have business interests in other countries and, even more significantly, there are foreign clients.

We interpret the relatively low frequency of international clients in U.S. law firms as a sign of the vast size of the U.S. legal market and the ability of most law firms in the U.S. to operate successfully with a local client base and a locally-focused practice. The United States has more than 44,000 law firms. Of this number, approximately 42,000 have fewer than 50 lawyers.

Although indicative of an international trend in the legal profession, as well as patterns of variations within the profession, the survey results cannot be considered to be representative of the entire population of lawyers and law firms. There are several reasons for caution in this regard.

First, the survey respondents were self-selecting and cannot be considered to be a representative sample of the lawyers practicing in law firms, either worldwide or by region.

Second, consistent with Walker Clark privacy policy, respondents were not required to provide a unique user identifier; nor was there any way to verify the validity of the demographic information provided. This made it impossible to prevent multiple entries from the same respondent..

Third, and perhaps most importantly, the survey was posted on a web site that attracts law firms and lawyers in international practice, especially in Latin America, Europe, and Asia. It is very likely that this skewed the results at least somewhat toward a higher percentage of respondents reporting service to local clients with international businesses and to foreign clients.

We believe, however, that the number of responses was large enough to produce useful information and hypotheses, subject to further investigation.


For full results report please visit the link below.

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