Organising to Serve International Clients
Many professional services firms operating out of London often manage their international business from there, sometimes through associates. London is seen by many firms as a global business centre and a hub for their operations. As business has become increasingly global for many Clients, especially those in the media and technology sectors, a local presence is more desirable to these Clients. A firm present in many countries is more likely to take on Clients whose operations also match that presence. If it is possible to broaden the firm's reputation by keeping a single brand and name, this is more acceptable to international Clients.
When law firm Bird & Bird decided to expand abroad, it sought the best entrepreneurial lawyers with local knowledge who could set up and run an office in their country. This has the advantage of management control and consistency of branding, keeping the Bird & Bird name intact. Many professional services firms are set up as networks, many are independent organisations under an international umbrella with common frameworks; others are structured globally. Another route to serving international Clients is through joining industry networks. An example of this approach, mentioned earlier by law firm Mills & Reeve, is the US-based SCG Legal, a global network of law firms.
Industrial corporations, such as those in the automobile sector, were among the first to recognise their purchasing power as global markets opened up. Purchasing decisions in global manufacturing are often made at HQ and then instructions to suppliers are cascaded down through the country operations. Supplier rationalisation and supply chain management have revolutionised these corporations and their purchasing has become more cost-effective over time.
Similarly, in internationally spread professional services firms, there is an expectation from Clients of a seamless, consistent service everywhere. As stated earlier, the challenge is to provide the same Client experience in all locations. This has to be the goal of an effective global firm. Cultural differences aside, this situation provides professional services firms wishing to have a global footprint with the biggest challenges.
CONSISTENCY WITHIN A GLOBAL NETWORK
Most professional services firms are international these days; Allan Evans serves on BDO's global board to ensure consistency in processes, structures and disciplines across the network. 'The same experience must occur wherever BDO does business. This is critical for mid-sized firms. For example, the Net Promoter Score system is becoming mandatory for all member firms.'
The Challenges of Managing International Clients
Many Clients of professional services firms have operations in many countries, so if a firm is represented locally, there is an opportunity to serve them. Clearly the management of international Clients has its challenges, especially as most professional services firms operate in global networks of independently owned organisations. Many questions arise when shaping international policy and Client management, for example:
• How well is your firm organised to deal with multi-country (and therefore multi-jurisdictional) Clients?
• How consistent is your branding and marketing communications across the network?
• Does your network provide a seamless, consistent service in all locations?
• Will Clients have sufficient access to key partners in all locations?
• How do you manage Clients in countries where your firm is not represented?
• Can your processes and systems cope with international communications and transactions?
• How will you manage Client expectations across geographic boundaries?
• How will you decide which Clients to manage globally?
• Who will take responsibility for managing global Client relationships?
• What pricing policy and structure is needed for a seamless operation?
• How should you communicate on cross-border enquiries?
• How should you respond to bid opportunities from international Clients?
• Which country will take the lead with a multi-country Client?
• How will Client satisfaction be monitored and reported?
• How frequently should your Client service teams meet or be in video conference?
• How well are your Client satisfaction programmes aligned in all countries?
• How will your business development initiatives be coordinated?
• What projects of interest to international Clients can you manage involving your network?
Many operational issues arise, such as:
• language capability;
• transfer pricing;
• IT systems compatibility;
• work planning processes;
• risk management and containment;
• legal and compliance variations;
• governmental rules;
• data protection and security;
• changes in country representation of the firm;
• cultural differences;
• project management.
Most professional services firms operating in global networks have established a central international headquarters staffed with people who oversee, and assist with, the development of the network by:
• Setting the strategic direction of the global organisation;
• Helping member firms to achieve the strategy;
• Providing guidance on legal and risk management compliance;
• Encouraging collaboration and sharing of resources between member firms;
• encouraging regular communications with, and between, member firms;
• ensuring that minimum standards are met across a wide variety of metrics, such as branding, marketing communications, BD and Client satisfaction;
• vetting and selecting new members for the network;
• administering new members and integrating them into the network;
• terminating membership where necessary;
• locating potential member firms where a country or service line is under-represented;
• managing international projects of benefit to member firms, for example, market research;
• managing the financial aspects of the HQ;
• coordinating cross-jurisdictional bids;
• facilitating contacts throughout the network.
HOW LAW FIRM BIRD & BIRD INTERNATIONALISED ITS BUSINESS
Just over 20 years ago, recognising the rapidly evolving needs of its core Client base, law firm Bird & Bird made a strategic decision to deliberately grow by global expansion. In 1998 Managing Partner David Kerr proposed his vision for the firm at the partners' retreat - the time had come to internationalise the firm through a single partnership, replicating the successful London model. At the time Bird & Bird's international presence only existed in Brussels and Hong Kong. Meanwhile, the firm's target Clients, particularly those in the technology sector - a rapidly growing market for Bird & Bird - were looking for a range of internationally available services. Although the firm was experiencing steady growth at the time, Kerr warned that there was a strong possibility of losing business to global competitors who were already building their international networks - the firm could even cease to exist in five years if they didn't act quickly.
Kerr explains that he had identified two routes to the internationalisation of the firm. The first, quite popular in the market and relatively easy to accomplish, was to have a loose international network where the firm did not share profits. The second, more innovative, option was to create a single partnership sharing a common financial interest. This latter model was agreed by the vast majority of partners and started to take shape by the millennium.
Rather than following the typical acquisition model, the agreed vision was to identify high-profile individuals in large non-sector-specific firms in the countries where Client demand was driving expansion and persuade them to join the firm. These people would be well-known in their field and local market and possess the entrepreneurial spirit to build and grow a business under the Bird & Bird brand in their country. In fact, many of these people had already worked with Bird & Bird. Kerr was frank with his partner colleagues when he said that one of the measures of the success of this strategy would be when the majority of the firm's partners were based outside the UK.
A small corporate development team headed by the firm's finance director was established to manage the firm's expansion, with a new CFO to manage the existing operations.
In 2000, Bird & Bird looked to France as their first new venture, already working with Clients such as BT. Their Brussels office had identified a strong potential candidate in a French firm who was eventually persuaded to set up a Paris office. Following the success of this venture, subsequent expansion was rapid, with offices opening in Sweden (2000), the Netherlands (2001) and Germany (2002). These were followed by an office being established in Italy (2003) as a result of a recommendation from Bird & Bird's thriving German practice. By 2004 Bird & Bird had over 100 partners and it opened an office in Beijing. Offices were opened in Spain in 2005, in central and Eastern Europe and Finland in 2008, in Singapore in 2009, in Abu Dhabi in 201 I, in Denmark in 2012 and in Dubai in 2013. Today the firm also has partnership agreements with firms in Australia, Malaysia, Portugal, Switzerland and Tunisia.
During this period of rapid expansion the corporate development team and partners were encouraged by the realisation that the Bird & Bird brand was quickly developing a strong reputation around the world, and by the willingness of its long-standing London Clients to extend their business to the international Bird & Bird offices. David Kerr anticipates that the firm will continue to expand.
Innovation with Clients
Another factor in the success of the firm's international reach strategy has been the determination to prioritise the Client service experience in every Bird & Bird location. One example of differentiation has been the creation of bespoke Client portals online with secure access for Client personnel and third parties to provide coordinated global legal services, visible matter management, transparent billing and easy access to documentation and know-how. This dynamic process is managed by a team of Client Relationship Executives. Whilst highly regarded by Clients, this offering also has the benefit of raising barriers to competitive entry.
The Way Ahead
In terms of their expansion, Asia and South America are cited as the next markets for development. With many of its Clients selling their technology globally, Bird & Bird is aiming to be the leading technology law firm outside the US, as well as developing in those markets where technology plays an increasing role such as energy, aviation, media and life sciences.