'If the world's largest law firm can't do it, how can a smaller one?' Dentons leaders on what's next
Joe Andrew and Elliott Portnoy on disrupting the networks, integration challenges and yet more expansion
November 02, 2016 at 09:47 AM
5 minute read
The original version of this story was published on Law.com
"We were the biggest fish in the ocean other than the referral networks, so we decided to use the same form to compete," says Dentons' chairman Joe Andrew of the launch of the Nextlaw global referral network.
The new network, which launched last month with some 283 member firms – including Scotland's Shepherd & Wedderburn and MacRoberts, and Portugal's PLMJ – has put Dentons in unashamed, direct competition with independent referral networks such as Interlaw and Lex Mundi.
"It threatens the way of life [for] traditional networks but for us, it is about serving clients. We're the largest law firm in the world but we can look at our clients and say 'there are places that we can't meet your needs', so we've created a network of firms to fill that gap. That's the innovation – not trying to be all things in all places."
For a firm like Dentons – which has made its name though multiple combinations in multiple jurisdictions as it pursues a 'polycentric' strategy that has looked very much like an attempt to be all things to all people – it marks a shift in approach.
Global chief executive Elliott Portnoy acknowledges the change. "In the old days, before we came together as Dentons, we used to exaggerate and pretend we could [be all things in all places], but clients are too sophisticated to fall for that," he says. "And if the world's largest law firm can't do it, how can a smaller one? It positions every conversation differently."
Andrew interjects: "Or the networks with one firm in each jurisdiction? We've disrupted their market – they have to figure out how to get to where we are."
Where Dentons is now, is 55 countries across Europe, the US, Canada, Asia and Australia.
But after a whirlwind of international expansion in 2015, when Dentons' landmark combination with China's Dacheng kicked off a year in which it signed deals with firms in the US (McKenna Long & Aldridge), Singapore (Rodyk), Australia (Gadens), Colombia (Cardenas & Cardenas) and Mexico (Lopez Velarde), 2016 has been uncharacteristically introspective for the firm.
That's not to say Dentons is no longer in growth mode – far from it.
According to Portnoy, the firm's plans follow a rough pattern – a period of growth through combinations, followed by a period of integration and innovation efforts such as the referral network.
He explains: "After a year of very significant growth, it's been about continuing our integration and innovation, and engaging in conversations that will lead to more growth next year."
The firm is currently engaged in discussions involving non-disclosure agreements with more than a dozen firms, which means 2017 looks likely to be busy – even given the firm's already extensive geographic reach.
Expansion across the US, Latin America and the UK are all on the cards, with the pair remaining undaunted about the post-Brexit prospects for the UK.
"Latin America is a priority, as is adding additional locations in the US. The UK is also very much a priority – it's about being deeper and broader. People may be saying that London won't be relevant for financial services post-Brexit, but we are opposed to that view. We think it's key to our market and will continue to be."
In contrast to most firms though, Dentons' future expansion will continue to involve less high profile locations. (The firm opened in Watford earlier this year, after taking on a 75-lawyer team from Matthew Arnold & Baldwin.)
"There's great talent in these regional markets and it's logical that the further you get from London or New York the less competition there is, so the easier it is to add revenue and profitability, because we're the only global firm there," says Andrew.
Of the 200 largest companies in the world, we're now advising 151 and suing another 28
Given the huge disparities in profitability across its network of offices, Dentons remains notoriously (and conveniently) opposed to profit per equity partner as a measure of success.
Instead, it uses a range of measures to benchmark performance, including its penetration into the largest multinationals. "One of our preferred metrics is our representation of the 200 largest companies in the world," says Andrew. "We're now advising 151 of these companies and we're suing 28, so couldn't act for those. This is compared with 63 before, so that's a big improvement with the big global players we had to convince most."
As part of a push to increase the number of Dentons offices these big companies are using, the firm is considering how to improve integration to make it easier to pull together deal teams from the firm's sprawling network of offices and lawyers.
First up is a concierge app to make it easier for lawyers within the firm to find help on a matter, which is due to launch in the coming weeks.
Concludes Portnoy: "One of the biggest challenges for us as we've grown has become tying the place together, and technology has helped us to be significantly more integrated. We're 10 times bigger than we were but we're better integrated. The integration process will never end – it's about onboarding every lawyer at every stage throughout their career."
Given the pair's continued expansion plans, binding its lawyers into the firm looks set to be a full-time task for years to come.
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