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Thinking global benefits law firm
BAKER & McKenzie's trail across the global village is reflected in the progression of its chairmen. The law firm was founded in 1949 by Russell Baker. Later, reflecting expansion to Europe, Frenchwoman and now IMF chief Christine Lagarde was chairperson. Today, the global chairman is Eduardo Leite, a Brazilian leading the firm into emerging markets, with 73 offices in 46 countries.
A graduate of New York University and University of Sao Paulo, Leite joined the firm in 1979 and became a partner since 1986. He is the first chairman from Latin America, but his vision goes far beyond just one region.
China figures prominently in that vision. The firm opened its Hong Kong office in 1974 and moved to the mainland to open its Beijing Office in 1993. The Shanghai office, which opened in 2003, was involved in Shanghai Jin Jiang Hotel's acquisition of Interstate Hotels & Resorts, in China Eastern Airlines' joint venture with Qantas to set up Jetstar Hong Kong, and in establishment of the Shanghai Disneyland Park.
Leite, here to celebrate the 10th anniversary of the firm's office in the city, discussed with Shanghai Daily world trends and how they affect Baker & McKenzie.
Q: What is Baker & McKenzie's strategy for China?
A: China is incredibly important to us. We see the number of Chinese clients doing business abroad growing by the year. We want to be part of that growth. We have commitment to China. It is overtaking the US as the number one investor in many countries, and I think that trend will continue. China is a big engine in the Asia-Pacific, not just for this decade but for this century.
Q: How do you view the China market in terms of increasing demand for legal services?
A: In the last 20 years, we have seen a great revolution in the way Chinese clients face international business. Chinese clients are more aware of issues like taxation and compliance overseas. They have also learned to choose their partners more carefully when they do joint ventures in other countries.
It is a learning curve for Chinese clients. The legal departments in China, in my perception, have become more sophisticated and are better trained. Younger members of legal departments are very skilled in international business and they have studied in many jurisdictions.
Chinese companies are very cost-conscious. But it is not just Chinese companies. All companies today need to control their costs, and service providers need to be wiser on everything from investing and pricing to management. Everyone has the same pressure, especially after the global financial crisis.
Q: Speaking of the global financial crisis, what's been the impact on your business?
A: Since the crisis in 2007, the world has become more and more regulated - so highly regulated, in fact, that the risk of excessive regulation is rising. We need to find the right balance to avoid another crisis.
Clients are increasingly cautious about their investments, particularly in challenging markets. The evaluation system is now more risk averse. Many clients are looking for deals, but only a tiny portion gets done. But there is optimism. We did a study with the Economist Intelligence Unit interviewing 350 CEOs. They all expect mergers and acquisitions to grow in the next two years because companies are liquid and need to expand.
There were challenges in the financial crisis, and we had to adjust quickly. Our diversity of practice provides a balanced portfolio that would be less affected by a downturn versus other firms that are more niche-focused.
Q: How does Baker & McKenzie differentiate itself from the service provided by rival firms?
A: We are a law firm offering a wide variety of legal services and specializing in cross-border mergers and acquisitions. We are different because we considered ourselves international from day one.
Our business is more attuned to clients because wherever we go, we have local partners.
When Chinese clients want to do business abroad, we have local partners who know the do's and don'ts. The cultural gap is usually one of the most challenging issues that any company faces.
Q: In such a competitive world, how does Baker & McKenzie recruit and retain good lawyers?
A: We have a professional development framework, the career path of a lawyer in Baker & McKenzie. We have very experienced talent managers, not necessarily lawyers, who train, define career paths, undertake evaluation, and provide rewards and incentives.
We need to think of ourselves as one team, where talent feels valued. We invest a lot in meeting each other. We have annual meetings that bring partners from all over the world together. That builds relationships.
Q: What is the biggest challenge for managing a global firm like Baker & McKenzie?
A: Anticipating what comes next. The world is changing rapidly.
The greatest challenge is how to keep ahead of the curve, how to offer our clients more customized service and how to train people to be client-driven.