Best in France Case Study Best in France Case Study ProjectProject

HERBERT SMITHHERBERT SMITH

Emmanuelle BRISSAUDEmmanuelle BRISSAUDJulie LUNEAUJulie LUNEAU

Fidji SIMOFidji SIMO

MethodologyMethodology

• Research of information about the French Research of information about the French legal marketlegal market

• Research of information about Herbert SmithResearch of information about Herbert Smith• Interview of an independant legal consultant Interview of an independant legal consultant

about the French legal marketabout the French legal market– Patrick BIGNON, Managing Partner of Law Patrick BIGNON, Managing Partner of Law

Management Consulting, consulting boutique for Management Consulting, consulting boutique for law firmslaw firms

• Interviews of Herbert Smith managers in Interviews of Herbert Smith managers in France:France:– Neil Brimson, partner, ex Managing PartnerNeil Brimson, partner, ex Managing Partner– Jean-Didier Billard, CEOJean-Didier Billard, CEO– à rajouterà rajouter

Presentation of the Paris office Presentation of the Paris office of Herbert Smithof Herbert Smith

• Core businessCore business– A law firm specialized in big businesses A law firm specialized in big businesses

since 1962.since 1962.– 4 main fields of activities: Banking and 4 main fields of activities: Banking and

Finance, Litigation and Arbitration, Finance, Litigation and Arbitration, Projects, Competition/Antitrust, Projects, Competition/Antitrust, a full a full service law firmservice law firm

– Specialization in Litigation and Specialization in Litigation and Arbitration and in Finance.Arbitration and in Finance.

– The French office has developped a big The French office has developped a big business in French speaking African business in French speaking African countries.countries.

Presentation of the Paris office Presentation of the Paris office of Herbert Smithof Herbert Smith

• ClientsClients– International firms that have activities International firms that have activities

in Francein France– French firms that have activities abroadFrench firms that have activities abroad– African governmentsAfrican governments– Examples: Air Liquide, Coca Cola, Examples: Air Liquide, Coca Cola,

Goldman Sachs, KPMG, Toyota, Goldman Sachs, KPMG, Toyota, Procter&Gamble, Merrill LynchProcter&Gamble, Merrill Lynch

Presentation of the Paris office Presentation of the Paris office of Herbert Smithof Herbert Smith

• Key figuresKey figures

Staff 2003

Staff 2004

Evolution 2003-2004

Number of partners

2003

Number of partners

2004

Evolution 2003-2004

Number of lawyers

2003

Number of

lawyers 2004

Evolution 2003-2004

Herbert Smith

75 75 0,00% 15 15 0,00% 60 60 0,00%

Turnover France

2003 M€

Turnover France 2004

Evolution 2003-2004

Turnover / partner

2003

Turnover / partner

2004

Evolution 2003-2004

Revenu per

lawyer 2003 K€

Revenu per

lawyer 2004

Evolution 2003-2004

Herbert Smith 23,5 23 -2,13% 1 468 750 1 437 500 -2,13% 331 600 353 846 6,70%

Presentation of Herbert Smith: Presentation of Herbert Smith: Herbert Smith around the Herbert Smith around the worldworld• LocationsLocations

– Head office in LondonHead office in London– Worldwide office for Herbert Smith and its best Worldwide office for Herbert Smith and its best

friends in Brusselsfriends in Brussels– 9 offices in Europe, China, Japan and Russia9 offices in Europe, China, Japan and Russia

• Best friends networkBest friends network– Formal alliance in the main European market Formal alliance in the main European market

with Gleiss Lutz and Stibbewith Gleiss Lutz and Stibbe– Sharing of the market between the three law Sharing of the market between the three law

firmsfirms– Transfer of competencies and strong presenceTransfer of competencies and strong presence– Visibility of Herbert Smith not altereredVisibility of Herbert Smith not alterered

The three key issues of the The three key issues of the setting up of Herbert Smith in setting up of Herbert Smith in FranceFrance

• The market The market

• The ressourcesThe ressources

• The valuesThe values

The marketThe market

• Historical reasons:Historical reasons:– The International Court of Arbitration is The International Court of Arbitration is

based in Paris and Herbert Smith had a based in Paris and Herbert Smith had a strong practice of Arbitrationstrong practice of Arbitration

– The crucial presence to foster the The crucial presence to foster the development of this practicedevelopment of this practice

– A setting up strongly linked with the A setting up strongly linked with the personality of the Paris office founder: personality of the Paris office founder: Doctor Mann, an arbitration expert Doctor Mann, an arbitration expert

The marketThe market

• Proximity with clientsProximity with clients

– Clients having branches in France and Clients having branches in France and occasionnaly confronted to French law occasionnaly confronted to French law rulesrules

– French clients having problems in their French clients having problems in their head office -confronted to French law- or head office -confronted to French law- or with their international branches – with their international branches – confronted to English law in that case-confronted to English law in that case-

– An activity that requires a human relations An activity that requires a human relations with the client: a need for interactivitywith the client: a need for interactivity

The marketThe market

• Cross borders dealsCross borders deals– As the core business is transaction this As the core business is transaction this

involves different places and different law involves different places and different law rules. rules.

– Increasingly companies are global and Increasingly companies are global and have many activities all around the worldhave many activities all around the world

– For the alliance to be strong an due to the For the alliance to be strong an due to the absence of the other members of the absence of the other members of the alliance, need for Herbert Smith alliance, need for Herbert Smith expansion in Parisexpansion in Paris

The marketThe market

• CompetitorsCompetitors– All majors competitors have an office in All majors competitors have an office in

ParisParis– The market is increasingly competitive : The market is increasingly competitive :

Maintaining market shares is crucialMaintaining market shares is crucial

RessourcesRessources

• TrainingTraining– Difficulties of a good recrutment policyDifficulties of a good recrutment policy

• Law firms need lawyers with analysis and Law firms need lawyers with analysis and expression skills and specialised lawyersexpression skills and specialised lawyers

•Law faculty is not choosen by the best profiles Law faculty is not choosen by the best profiles and don’t propose a specialised and an and don’t propose a specialised and an international-oriented traininginternational-oriented training

– However, progress is madeHowever, progress is made•English is mastered by many students English is mastered by many students •This enables transfer of lawyers in other This enables transfer of lawyers in other

officesoffices

RessourcesRessources

• French lack of flexibilityFrench lack of flexibility– French labour market specificitiesFrench labour market specificities

•Hard to find workers doing extra timeHard to find workers doing extra time

•Hard to find assistant for punctual filesHard to find assistant for punctual files

– Administrative constraintsAdministrative constraints•35 hours a week35 hours a week

•Cost of employement and hiringCost of employement and hiring

RessourcesRessources

• Specificities of being a lawyer in Specificities of being a lawyer in FranceFrance– Independant statute Independant statute don’t have to don’t have to

abide by Labour law contrary to other abide by Labour law contrary to other countries countries

– Enable them to avoid French labour Enable them to avoid French labour market rulesmarket rules

ValuesValues

• Individualism: lawyers are Individualism: lawyers are traditionally really independant but traditionally really independant but in France this feeling is strongerin France this feeling is stronger– Visible through the language: « Come to Visible through the language: « Come to

my law firm », « Personally, I think my law firm », « Personally, I think that… »that… »

– Due to historical reasons: law firms were Due to historical reasons: law firms were traditionally societies where the only traditionally societies where the only thing in common was the ressources, vs thing in common was the ressources, vs the model of partnershipsthe model of partnerships

ValuesValues

• The French culture regarding work is The French culture regarding work is totally incompatible with the totally incompatible with the requirements of a law firmrequirements of a law firm– The functioning of a law firm requires to The functioning of a law firm requires to

be available for the client at every be available for the client at every momentmoment

– The impredictable work requires to do The impredictable work requires to do extra hours very frequentlyextra hours very frequently

– But it is really difficult to find people, But it is really difficult to find people, especially among secretaries or other especially among secretaries or other assistants, that are willing to work hardassistants, that are willing to work hard

ValuesValues• A totally different image of the lawyer in A totally different image of the lawyer in

France and in Anglo-saxon countriesFrance and in Anglo-saxon countries– In France, the lawyer is perceived as a theorician, In France, the lawyer is perceived as a theorician,

a pure legal experta pure legal expert– On the contrary, Anglo-saxon lawyers are On the contrary, Anglo-saxon lawyers are

perceived in France as wheeler-dealers, perceived in France as wheeler-dealers, commercials, more interested in money than in commercials, more interested in money than in theorytheory

– It is linked with the different nature of the law It is linked with the different nature of the law system: common law vs civil lawsystem: common law vs civil law

– There is a kind of sin of pride, due to the There is a kind of sin of pride, due to the specificities of the French training: without the specificities of the French training: without the possibility to specialize, French lawyers believe possibility to specialize, French lawyers believe that they know everything about the law rulesthat they know everything about the law rules

– It’s the reason that explain the slow development It’s the reason that explain the slow development of the profession in France: in France, the relation of the profession in France: in France, the relation to money is strictly linked with notions of moralityto money is strictly linked with notions of morality

Prospects for the futureProspects for the future

• The expansion of the French office is The expansion of the French office is mandatory in the alliancemandatory in the alliance

• But on such a competitive market, ther is a But on such a competitive market, ther is a need to find new sources of profitneed to find new sources of profit

• That’s the reason why the African expertise That’s the reason why the African expertise of Herbert Smith can be an important assetof Herbert Smith can be an important asset– Because Africa is gaining importance in this Because Africa is gaining importance in this

market due to the trade of raw materialsmarket due to the trade of raw materials– Because Africa doesn’t have an unified law, Because Africa doesn’t have an unified law,

which requires the involvement of lawyerswhich requires the involvement of lawyers

RecommandationsRecommandations• GlocalizationGlocalization

– Being full service using the alliance and Being full service using the alliance and fostering cross fertilization of practicesfostering cross fertilization of practices

– At the same time, developing local specificities At the same time, developing local specificities in each officein each office

• Attract the best profilesAttract the best profiles– Internationalizing the recruitmentInternationalizing the recruitment– Fostering tranferts across officesFostering tranferts across offices

• Try to develop a worldwide culture of the Try to develop a worldwide culture of the firmfirm– To reduce lawyers’ individualismTo reduce lawyers’ individualism– To unify the practices in the different offices To unify the practices in the different offices

(behavorial control)(behavorial control)

AcknowledgementsAcknowledgements

• Mickael SegallaMickael Segalla

• Jack AndersonJack Anderson

• Neil BrimsonNeil Brimson

• Jean-Didier BillardJean-Didier Billard

• Dominique BraultDominique Brault

• Patrick BignonPatrick Bignon

SourcesSources

• Legal WeekLegal Week

• The LawyerThe Lawyer

• Law.comLaw.com

• Chambers Global 2005Chambers Global 2005

• Legal 500Legal 500

• Décideurs JuridiquesDécideurs Juridiques