Hi @gazdgazd11 just to add to the excellent points made by @Ram Sabaratnam I would also consider the following three factors:
- Current client demand: for many firms who consider expanding a crucial point is whether current clients have any operations or need for legal services in that foreign jurisdiction. If you already have an established relationship in London or the US, it is a lot easier to win mandates from a given client in the new jurisdiction rather than winning mandates from new clients (where the firm would have to impress in a pitch to convince them to leave the firm they were previously working with). Furthermore, expanding in the main jurisdictions where your current clients need advice is a way of reducing the risk of them being won over by other firms (as a firm who advises a firm for a mandate in, say, Spain, might as well impress them and then persuade them to give them UK mandates as well). These two factors were central in Brad Karp's decision to invest as much as he did in Paul, Weiss' unprecedented expansion in the City- the firm was reportedly facing increasing demands to have a top London practice form Apollo, one of its most important PE clients.
- Cost of setting up shop: depending on the state of the legal market in the jurisdiction and the method of expansion chosen (acquisition/merger of a local firm, lateral hiring, organic growth or a combination of the three), the costs of investing in a new office can differ immensely. Establishing a top office in New York for instance is a herculean task, as the combination of sky-high associate and partner salaries and the size of competitors requires a huge amount of invested capital (which, among other things, explains why the Magic Circle firms have found it so difficult to compete with the US firms on their home turf).
- Legal fees: another crucial consideration is the range of billing rates clients in that jurisdiction are willing to accept. In developing countries companies expect to pay significantly lower fees than in the US and Western Europe. Thus, setting up shop there can result in a dilutive effect on profit pools.
Hi @Andrei Radu,
This might sound like a silly question, but how does a firm balance meeting its clients’ needs against its own? In the case of Paul, Weiss, you mentioned that Brad Karp (Chairman) made the decision to invest a lot into Paul, Weiss’ unprecedented expansion into London, with the firm facing increased demand from its PE client Apollo to have a London practice. How does a firm like Paul, Weiss assess (internally) whether what their client wants or needs is suitable for their firm? Of course firms like Paul, Weiss want to attract and retain their clients, but does this mean that law firms like Paul, Weiss are put under significant pressure to comply with client demands at all costs? Apologies if this sounds like a dumb question lmao. 🥲🥲
This might sound like a silly question, but how does a firm balance meeting its clients’ needs against its own? In the case of Paul, Weiss, you mentioned that Brad Karp (Chairman) made the decision to invest a lot into Paul, Weiss’ unprecedented expansion into London, with the firm facing increased demand from its PE client Apollo to have a London practice. How does a firm like Paul, Weiss assess (internally) whether what their client wants or needs is suitable for their firm? Of course firms like Paul, Weiss want to attract and retain their clients, but does this mean that law firms like Paul, Weiss are put under significant pressure to comply with client demands at all costs? Apologies if this sounds like a dumb question lmao. 🥲🥲