Andrew: Learning from the Big Four
The chairman of the world’s largest law firm, Dentons, has outlined a future of continued expansion, merging with both law firms and in time non-legal businesses around the world, including the UK.
Joe Andrew said the scale of Dentons – 11,000 lawyers in 188 locations, in 76 countries – put it in “a different league” from the rest of the global elite in size terms.
Dentons’ phenomenal growth in the past five years is predicated on having the skills and access to clients that no other firm can match. Mr Andrew said: “When a client needs expertise, we’re more likely to have it.”
It looks to grow through merger rather than hiring a few partners to open an office.
This year it has already announced what it calls ‘combinations’ in New Zealand, South Korea, Uruguay and Argentina, on the back of Chile, Honduras, Morocco, Australia and Uganda last year.
Mr Andrew told Legal Futures that the firm was appointed to 81% of global panels it pitched for last year, compared to 13% before the strategy was introduced.
Last November, we reported on the launch of Project Golden Spike, Dentons’ strategy to serve as many of the 100 largest legal markets in the US as possible – even many mid-sized US legal markets are larger than those of entire countries, with the UK the only European legal market bigger than New York’s.
Across the US, 69 of the largest 100 legal markets are not served by one of the 10 largest firms.
This is despite the fact that the headquarters of the largest 3,000 publicly held companies in the US are broadly distributed across the nation.
Golden Spike launched in October by announcing two mergers that in January created an operation with 33 offices, including offices in nine of the 10 largest markets and 14 of the top 20.
Yesterday the first deal since then was announced, adding nearly 100 people and four offices in Utah by combining with leading local firm Durham Jones & Pinegar.
Mr Andrew noted that while every global law firm and the New York elite has an office in Budapest, none were in Utah’s capital, Salt Lake City, where corporate legal spend is more than three times that of Hungary.
Dentons is offering a ‘one firm, dual partnership’ model, allowing law firms to retain their individual status but also join a national Dentons partnership.
Mr Andrew said Golden Spike was just a name for the principles the firm was already applying around the world.
As to why Dentons did not therefore have a presence in Manchester, Leeds, Birmingham and other major legal centres in England and Wales, he said this would likely happen in time but such locations were not a current priority given the UK’s business demographics.
Some 80% of the UK’s 1,000 largest companies are based in London; in the US, just 8% of the largest companies are based in New York.
But he stressed the role of local lawyers in building close personal relationships with their clients and becoming “portals” for them to access the whole firm, especially in a post-Covid world where there is likely to be less international travel.
As an example, one of the 10 biggest matters Dentons handed last year was sourced from its office in the little-known location of Jasper, Indiana, where a major poultry producer is located. The same office has just originated work in Indonesia.
It also aims to have a broader offering than most large firms. “We have to be able to do the CEO’s grandmother’s tax return as well as handle the business’s tax affairs,” Mr Andrew said. “It’s about total profitability, not individual metrics on a matter by matter basis.”
In expanding in this way, Dentons may be unique in the legal market, but is following the example of consulting businesses in other sectors, most notably the Big Four accounting firms.
Mr Andrew said he did not worry about the Big Four – his focus was on learning from them.
This included offering more than just legal services. “Once we feel we have a platform that’s big enough – and we’re close – we want to become a more general consultancy business,” he explained.
“The idea of being more than a law firm begins with a series of advisory services where you have the same decision maker – the general counsel…
“We will begin to replicate in a moderate way some of the highly profitable things [the Big Four] also do.”
This meant areas such as economics analysis – to complement competition law work – government affairs and “commercial diplomacy”, but not audit.
Given the regulatory difficulties in many countries of non-lawyer partners and the like – although “some of the highest compensated people in the Big Four are not partners”, he observed – Mr Andrew said Dentons would build a separate consulting business that would allow it to combine with non-legal companies and also attract third-party financing to support the growth.
He added that the other global elite law firms were eyeing up similar moves.
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