Australasian law firm Minter Ellison has climbed to the top of the table of ALB's 50 largest law firms in Asia. With a total lawyer headcount of 1476, of which 282 are partners and 1194 are other qualified lawyers, Minters just outscores Australian heavyweights Mallesons Stephen Jaques and Allens Arthur Robinson. But Mallesons and Allens, together with Freehills, have their revenge in Australia's largest law firm table, pushing Minters down to 4th place.

The dominance of Australian firms at the top end of the ALB50 is perhaps not too surprising. The sheer headcount alone at the country's preeminent firms has been enough of a turnoff for a Clifford Chance, a Linklaters, or any other international firm contemplating a merger Down Under… that and the relatively low hourly rates and the continuing low value of the Australian dollar.

Nestled just behind the Australians are the leading Kiwi firms, with similar market conditions as the Australians, and a batch of the most expansionist UK firms. Despite investing heavily outside of London for many years, the Brits still have some way to go in Asia if they are to catch their Australian cousins. Although Allen & Overy is leading the charge, with 63 partners in the region and 254 other qualified lawyers, the ALB50 illustrates that the process of globalization, for want of a better word, may have only just begun.

Perhaps of most interest in the ALB50 is the presence of PRC firms Jun He Law Offices, Allbright Law Offices and King & Wood, the latter being ranked as the 13th largest firm in Asia, with a total headcount of 346.

Although Australia just kept China at bay last year to end up as the region's busiest market for mergers and acquisitions activity, Thomson Financial's latest findings did reveal that the sheer volume and value of deals being completed on the Mainland would soon see it topple Australia.

Who cares?
But what of this preoccupation with size… and… at the end of the day, does it really matter?

Firms not topping their respective country tables or who have not featured in the ALB50 invariably say no. Instead, they point to profitability, insisting the world's most successful and profitable law firms are not necessarily the largest.

And they are right… to a degree. The larger a law firm gets, the more resources have got to be devoted to servicing the needs of the firm. This is an opinion shared by many.

"There are profitable firms of all different sizes," says Tony D'Aloisio, chief executive partner at Mallesons, "large firms that are very profitable and large firms that are not.

"Similarly, there are small firms that are profitable and those that are not. What matters is the value you can provide to clients within the markets in which you operate."

Baker & McKenzie's Hong Kong managing partner David Fleming agrees.

"Profitability is about a lot more things, such as your cost base, billing structure, and price competition," he says. "Size is one of the relevant factors but by no means the only one. Size gives you depth of resources and geographical coverage, for example, but it's all about demonstrating service qualities to clients."

For Phil Clark, managing partner of Asia's largest firm Minter Ellison, to have size and profitability is to have the best of both worlds, but he points out: "It's not smart to aim for size for size's sake in tough economic times like these."

Clark puts his firm's success down to sticking to what it does best. "We don't try to dominate capital markets work, for example, because the UK and US firms have that stitched up. Our focus is on projects, construction, employment and technology, and this is where our growth is coming from."

When it comes to serving clients, the preeminent law firms around the region show a remarkable tendency to sing from the same hymn sheet.

Says D'Aloisio: "The most important factor for us, in terms of partners, lawyers and staff, is quality rather than quantity. But obviously size is a big advantage when it comes to large transactions as we need to be able to offer a wide range of specialties."

Compare that with the view expressed by Seyyed MJ Iqbal Jafree, chairman of Geoffrey and Khitran, Pakistan's oldest and largest law firm.

"As a morality-oriented and low profit law firm, we find it is not the quantity but the quality of our lawyers that matters. Of course, our size is beneficial, mainly because we can call upon the resources of a larger number of lawyers."

How much of this is PR-speak and to what extent are law firms kidding themselves? The most important judges of that must be the clients. But to what extent do they care about the profitability of a law firm? And with firms unwilling to release sensitive financial information anyway, to what extent is this argument a red herring?

"Size is totally irrelevant in terms of quality of advice given," says Magnus Spencer, head of legal, ex-Japan, at Barclays Capital. "At Barclays Capital, we focus on individuals. If we wanted to use a firm in Taiwan with only three partners, we would.

"And just because a firm has lots of partners, doesn't automatically mean they are going to be profitable," he adds.

The new general counsel at the Asian Development Bank in Manila, Arthur Mitchell, runs an in-house team of 29 lawyers from 24 (member) countries. Despite such critical mass, the Bank outsources work in the private sector in areas such as power projects, private equity funds and venture capital funds.

Although the ADB runs a panel of firms, Mitchell says it is not a "closed-end panel".

"By that I mean that if we have to bring in an outside law firm, we do open it up to firms rather than simply pick from a panel."

Citing his predecessor's policy, Mitchell says: "We go to outside firms that have a real presence in the region and, in some ways, supplement the skills we have."

Previous beneficiaries have included Allen & Overy, Herbert Smith and White & Case - each of which is among the largest 25 law firms in Asia.

Mitchell says the ADB looks for "the usual" things on the CV of any firm pitching its services: capability and experience.

"We very often want international law firms with local law capability - either through their own people or in a joint venture. There's no magic to it. We just see who has the most relevant experience for what transaction we're doing."

Catch 22
To get the experience, you need to win the tenders. And to win the tenders, at least for some transactional work, you need to be able to offer the necessary critical mass.

Susan Ning, a partner at King & Wood, China's largest firm, says: "There is a link between size and profitability. Size adds volume to our total revenues and increases partner profits.

"And I do not think size and profitability are mutually exclusive," she adds. "Operating on economic scale will link the two together. And the broader areas of practice, resulting from larger size, will open more sources of work to each of our practices, which is especially attractive to larger clients looking for one-stop shopping.

"Take our IP rights protection department, where we now have 14 partners working - a position that is unique in Chinese law firms. This is a real service for clients," says Ning. "When dealing with patents, we can therefore cover mechanics, physics or biochemistry - whatever the client needs."

So, for all the protestations, it seems law firms are stuck in a Catch 22 situation. That is certainly the view of Roberto San Juan, a partner at Sycip Salazar Hernandez and Gatmaitan, the largest firm in the Philippines.

"Size is ultimately determined by the amount of work coming in," he says. "You cannot become large if the work is not there, but equally you cannot attain this success unless you offer a quality service."

Baker & McKenzie's Fleming perhaps sums up the competing arguments best.

"Size wouldn't turn the head of an in-house counsel but it gives them an indication of resources."