As more Asian economies reach a level of maturity that enables local corporations to look for investments beyond their national borders, global law firm associations are doubling their efforts in this region to make sure their members secure a piece of the advisory pie

Cross-border M&As in Asia are on the rise. As emerging markets continue to develop, not only do more opportunities for investments and takeovers present themselves, but local corporations also gain enough confidence to test the international waters.

"Companies today are increasingly seeking targets in more far-flung destinations," conclude the researchers of the Economist Intelligence Unit in a survey into global M&A activity, held in January. "The rapid development of some countries in Asia, the Middle East and Latin America has created a whole host of new opportunities for acquirers in these regions, while at the same time turning local companies into acquirers in their own right."

Several countries in particular have come under the spotlight, with Vietnam, Korea and Thailand becoming increasingly attractive destinations. Their renewed interest is part of a global trend. The Economist's survey asked 670 executives worldwide which region they considered as the most attractive destination for M&A, and 57% mentioned China, India and South East Asia as their preferred destination over the next 18 months.

The attractiveness of the Australian resource sector and its nexus with Asian development is of course well known. Western Australia, for example, has seen Chinese corporations hunting for mining and natural resources companies to secure the continuous supply of minerals. There is also anecdotal evidence that Japanese corporations have ramped up their investments in construction projects in recent months, especially in Queensland.

Joining forces
For law firms that do not have an extensive network of international offices, the question is how they can tap into this source of cross-border advisory work, without having to set up costly new offices. Teaming up with an international player is one approach, but such opportunities are rare. Meanwhile, there is another alternative - membership of a global alliance. James Mendelssohn, CEO of MSI Global Alliance, says he has seen an increase in applications for membership over 2007. "We received
250 cold applications in 2007 - those are applications from law firms that we had never heard of before."

And where globalisation is the name of the game, it is not hard to see why independent firms are scrambling to join an alliance. "The key advantage for today's independent law firm is that it can service and retain larger clients that have international business interests, without going through the pain of a merger or being swallowed up by a larger firm," says Mendelssohn. "Without membership of an organisation such as MSI Global Alliance, the firm may have lost its most important clients to larger national or international law firms." And that is the key point. Much of the increase in interest stems from the realisation that law firms need to have an international network to not only attract new clients, but also retain existing clients.

This, says Mendelssohn, applies especially to mid-sized law firms. "Clients say that they want to stay with these firms because they enjoy the personalised service, but they need international representation. The benefit of joining an alliance isn't just about waiting for a phone call and signing up a big new client from Hong Kong; it's also about retaining existing clients." The other advantage of membership, says Mendelssohn, is the kudos which accompanies it. "So for an independent firm, promoting one's status as a carefully selected, exclusive member of one of the more high profile associations is an increasingly important business development resource; MSI members are regularly winning work from nationally or internationally focused companies that would previously have been the exclusive domain of the big firms."

MSI is also looking to build stronger ties with the Asia-Pacific region, in particular greater China. Three months ago, it welcomed a new Hong Kong member, Or Ng & Chan, to its ranks. It has also scheduled a meeting of member firms in Beijing for October.

No guarantees
Despite the seemingly growing interest from law firms to join alliances, the options are often limited, especially when seeking memberships with some of the more established alliances. Most alliances allow only one member per jurisdiction, in order to provide members with exclusivity. "We're a fairly mature network and therefore don't allow many new members," says Carl Anduri, president of Lex Mundi, a well known global alliance of full-service firms. Anduri says the alliance receives regular
enquiries from law firms wanting to join the association. Only occasionally new positions become available. Lex Mundi reviews its members every eight years and has expelled law firms from the network in the past for allowing their quality standards to slip. "Membership isn't guaranteed," Anduri says.

Member services
There are also a number of more practical benefits of joining an association. Members of Lex Mundi, for example, can contact each other for up to 30 minutes of free legal advice. All associations provide a host of seminars and professional development opportunities - along with the chance to build those all-important international contacts.

Other services are perhaps less commercially oriented. Pro bono work is an important part of any firm's profile and global associations can help members gain access to pro bono opportunities. Lex Mundi, for example, has a Pro Bono Foundation which is focused on providing pro bono assistance to what it describes as "social entrepreneurs" or change makers - people who use an entrepreneurial approach to solve social problems on a local or global scale. Examples of work that members have been involved in include defending the developer of a bamboo gasifier to produce environmentally clean electricity from administrative action, and providing legal assistance to Kiva Microfunds, a US-based organisation that facilitates microlending to economically disadvantaged people worldwide.