East meets West – assessing Asia's performance in the Client Satisfaction Report
When does a market evolve from 'emerging' to 'emerged'? As a continent, Asia can claim to be both, with mature legal markets in the likes of Hong Kong and Singapore sitting alongside developing markets in Myanmar and Vietnam, which are only now attracting the attention of international law firms. Across the continent as a whole, divergent legal cultures and laws mean that, at times, lawyers practising in the region have to overcome many of the developmental curves shared with other, less mature, emerging markets. And because many still attempt to service the region as a whole through one or two central hubs in more developed legal jurisdictions, clients are reporting mixed satisfaction levels, according to Legal Week Intelligence's annual Client Satisfaction Report (CSR). In this year's report we look specifically at Asian legal clients and what matters most to them. Out of 98 law firms in total, we have selected the top three firms in Asia ranked for client satisfaction: King & Wood Mallesons (KWM), Clifford Chance (CC) and Herbert Smith Freehills, as in 2013-14 major Western firms dominate the top positions. Meanwhile, Asian clients are collectively slightly more satisfied than clients in other parts of the world, giving the firms they instruct an average overall satisfaction score of 7.33, beating the global average of 7.27.
March 05, 2014 at 05:58 AM
8 minute read
James Mayer looks at how Asia's burgeoning law firms are succeeding in satisfying their clients
When does a market evolve from 'emerging' to 'emerged'? As a continent, Asia can claim to be both, with mature legal markets in the likes of Hong Kong and Singapore sitting alongside developing markets in Myanmar and Vietnam, which are only now attracting the attention of international law firms.
Across the continent as a whole, divergent legal cultures and laws mean that, at times, lawyers practising in the region have to overcome many of the developmental curves shared with other, less mature, emerging markets. And because many still attempt to service the region as a whole through one or two central hubs in more developed legal jurisdictions, clients are reporting mixed satisfaction levels, according to Legal Week Intelligence's annual Client Satisfaction Report (CSR).
In this year's report we look specifically at Asian legal clients and what matters most to them. Out of 98 law firms in total, we have selected the top three firms in Asia ranked for client satisfaction: King & Wood Mallesons (KWM), Clifford Chance (CC) and Herbert Smith Freehills, as in 2013-14 major Western firms dominate the top positions. Meanwhile, Asian clients are collectively slightly more satisfied than clients in other parts of the world, giving the firms they instruct an average overall satisfaction score of 7.33, beating the global average of 7.27.
Distinct positives identified by Asian clients commissioning Western firms in the region include better service delivery and responsiveness, quality of legal advice and use of flexible workforces.
"As far as the emerging economies in Asia are concerned, my key concerns are the professionalism and expertise of the lawyers assigned to my case, as well as their English language and efficiency skills," argues Judith Crosbie-Chen, associate general counsel for Logitech in Hong Kong. "Confidentiality is also a concern in many jurisdictions where injunctions are not a practical solution."
Successful results, impersonal delivery?
Denis Brock, a Hong Kong-based partner at KWM, believes the key obstacles in Asia can be summed up in two words: protectionism and geography. "Protectionism is a differentiator. Hong Kong, Australia and New Zealand lead the way in terms of openness and few restrictions to foreign firms operating there. Japan, Korea and mainland PRC are liberalising and are in various states of openness. On the other hand, India is the most restrictive as it is impossible to open an office and practice."
As many clients believe, standards and quality of advice vary depending on the country, with jurisdictions such as Hong Kong, mainland China and Singapore setting the standard for service delivery and quality of advice.
For the in-house community, mainland China is the centre of attention for development. "In terms of in-house, the mainland China market is growing, especially in light of the GSK scandal – compliance is starting to be taken seriously," says Gill Meller, legal director and secretary of metro operator MTR Corporation. "There are many opportunities for lawyers with a good education and strong foreign law experience to take an in-house job on the mainland."
However, Asian clients offer a paradoxical and somewhat unprecedented view of satisfaction with their lawyers. On one hand, the legal work they commission is highly rated for service delivery and responsiveness. Conversely, clients increasingly feel that their legal advisers are kept at arm's length from them and are ultimately let down by their relationships with partners.
When asked 'Are legal services delivered on time and are your firms reliably responsive to your needs?', clients give a resounding 'yes', giving their firms a mark of 8.5 overall, a substantial 0.4 over the global average of 8.1. KWM, which recently merged with UK firm SJ Berwin, claims first place in this category, with a high score of 9.2 and a personal/partner relationships score of 9.3.
Brock believes the firm's high score is due to giving clients realistic expectations: "For me, it is really all about managing expectations, especially with time and money, with partners ensuring clients get what they want, when they expect it and at an agreed price; in short – no surprises."
Unfortunately, while the standard of work may be high, clients feel many Asian partnerships fail to provide a personalised relationship, giving these firms an average score of 7.9. This is noticeably short of the global average of 8.2 and the higher average achieved by African firms of 8.6.
Crosbie-Chen says this may be due to staff turnover: "It is hard to generalise, but I suspect that turnover of good experienced attorneys is still relatively high in the emerging markets of Asia, which can be disappointing for Asian clients who have invested time and energy in getting their outside counsel up to speed."
When Legal Week Intelligence interviewed these clients, personal/partner relationships were a frequently cited concern, with multiple clients seeking "more and deeper engagement from senior lawyers". Because of this, firms will be challenged to simultaneously maintain service levels while giving clients more face time from senior staff, or they may see these scores fall in tandem rather than rise.
Global + local expertise = happy client
Clients view advice as by far the most important constant on their agenda, giving it an average score globally of 9.5 out of 10 for importance. But does a less emerged market mean greater satisfaction with the quality of legal advice? Our analysis shows that this might actually be the case.
Across all geographies, clients are not as satisfied as they expect to be, with satisfaction falling a full point below the rating they give it for importance at 8.5. Characteristic of emerging market respondents, Asian clients are slightly more pleased with the quality of advice they receive, scoring it 8.6.
According to the CSR, international law firms with a strong presence in Asia are leading the way when it comes to the provision of high-quality legal advice. Clients of CC's Asian practice, which claims second place among firms in the region, compliment the firm's "breadth of experience" and "the partners' knowledge on Chinese funds/the regulatory environment". Unsurprisingly, commercial advice follows the same trend, scoring 8.1, or 0.1 over the global average of 8.0.
Saving satisfaction
As reflected across the 2013 CSR, the use of flexible workforces, including paralegals and legal executives, has become the norm when tightening budget screws at Western firms. However, this does not seem to bother clients, as they rate the need for using a flexible workforce at only 5.2. In a reversal of the norm in client satisfaction surveys, clients score their satisfaction levels in this area higher than they score its importance.
Crosbie-Chen paraphrases this view: "In this era, where in-house teams are under constant pressure to try to do more with less, cost-saving initiatives by outside law firms are to be welcomed, provided that those firms are totally transparent about these measures; that they pass on the cost savings to their clients; and they still meet 'hard deadlines' that have been agreed upon at the start of the assignment."
Satisfaction is especially strong among Asian clients, where flexible workforce use scores 6.3 – 0.3 over the global average. The big multinational firms that dominate the Asian CSR this year are more likely to be adept at this type of flexible cost control, and this is reflected in the higher satisfaction scores. The absence of local firms in the rankings this year may serve as proof that they do not have the resources to deploy these workforces adequately.
Rising legal markets
As markets grow in maturity, it stands to reason that clients might become more demanding and there is some evidence that this is happening in Asia. For example, in 2012 Asian clients gave the firms they instruct a satisfaction score of 7.4 for costs. In 2013 this score had slipped to 7.0. It will be interesting to see whether the 2014 survey finds client satisfaction levels in Asia converging with satisfaction levels recorded in more mature markets in Europe and the US.
One thing that does seem likely is that the Asian legal market will continue to grow and diversify, presenting law firms operating in the region with both opportunities and challenges as they seek to meet increasing client expectations.
As Brock concludes: "Asia (like Africa) is not a monolithic market. But unlike Africa, the capital markets of Hong Kong, Singapore and increasingly Kuala Lumpur are natural conduits for investment flows. The diversity of markets – capital rich and capital hungry – is a key characteristic in Asia."
For more on the report, see: Client Satisfaction Survey 2013 – the results are in, or contact Des Cahill on 020 7316 9066 or [email protected].
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