Last month, Cleary Gottlieb Steen & Hamilton did something that it has only done once before – open two non-US offices in the same year. Seoul became the firm’s sixteenth office, launching just a month after Cleary opened its fifteenth office in Abu Dhabi. The only time the firm has previously opened two offices in a year was 1991 when it launched in Frankfurt and Moscow.
Cleary does not open offices lightly; it opened its first foreign office in Brussels in 1960 and has taken more than 50 years to open its 13 other non-US offices. So when it makes such a move, you can virtually guarantee it’s going to be in markets that will deliver.
The floodgates are set to open in South Korea. Seven firms now have permission from the Ministry of Justice to open in Seoul, while at least another ten are in the process of applying for licences or have announced plans to open in the country.
The latest flood of activity signals the peak of the international law firm feeding frenzy in Asia. Seoul and Singapore are both on the verge of saturation. Reed Smith became the latest firm to announce its plans to launch in Singapore in October, the latest of a rash of international law firms that have launched (or in Freshfields Bruckhaus Deringer’s case, relaunched) in the city state in the past 12 months.
The latest flood of activity signals the peak of the international law firm feeding frenzy in Asia.
Law firms have been sniffing around Singapore and South Korea for some time now and finally the inevitability of being left without a credible presence in two of the most business-critical markets for any international firm has dawned on many. Any firm that isn’t near the front of the queue for the appropriate licences risks being too late to the party.
However, one trend is particularly noticeable. In the space of one month, two firms have announced virtually simultaneous expansion in Korea and the Middle East. In addition to Cleary’s move, Squire Sanders announced a new office in Seoul and the extension of its Saudi Arabia practice, both in October. Coincidence? Probably, but then you might argue that Cleary is the type of firm that leaves nothing to chance.
Consider these moves in the context of a recent Latham & Watkins-commissioned report, which says that nearly three-quarters of Chinese investors regard trade and investment in the Middle East and North Africa region as ‘very important’ for China’s economic future. If this is the case, then simultaneous Asia and Middle East expansion looks even more compelling.
Although the Latham report focused on investment attitudes from China, the implications for future trade between the continents are clear. For example, bilateral trade between China and the UAE has been increasing steadily over the last decade and is expected to exceed $100bn by 2015. Trade between South Korea and the UAE reached $22bn in 2011, according to figures from the Korea Trade Information Services (Kotis).
It seems joined-up thinking on international expansion, rather than treating regions in isolation, is the way to achieve competitive advantage. Getting into a market first is one thing; getting into complementary markets at the same time is even better.