19 Oct 2013

Australian legal industry reaches the globalisation tipping point

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This article is taken directly from Beaton Capital’s website. Written by analyst Eric Chin, it charts the globalisation of the Australian legal industry.  The Founder of Beaton Capital, Dr George Beaton, is a respected commentator on, and consultant to Australia’s largest law firms. If you have not read his prescient messages before, you would be well advised to do so now.  The full text of this article can be found here: link.

“The tipping point is that magic moment when an idea, trend, or social behaviour crosses a threshold, tips, and spreads like wildfire.” Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference

Fifty years ago Baker & McKenzie was the only foreign law firm with a presence Down Under.

Today there are 21 offshore firms with various sizes of presences and structures in Australia. The 20 largest law firms in Australia account for 21% of the Australian legal industry’s $23 billion annual revenue. Beaton Capital analysed the 20 largest Australian firms to determine the extent of globalisation amongst them. The chart below shows the total annual revenue generated by these 20 and their predecessor firms in Australia since 1999.

Until 2009 Baker & McKenzie was the only international firm in the Top 20. This changed when Deacons merged with Norton Rose on 1st January 2010. DLA Phillips Fox was next to follow as it merged fully with DLA Piper on 1st May 2011 having been in an alliance as DLA Phillips Fox for five years. At this point, the international firms in Australian Top 20 consisted of Baker & McKenzie, Norton Rose and DLA Piper, whose combined revenue accounted for $606m.

The tipping point for globalisation occurred in 2012 as ‘foreign’ revenue exceeded domestic for the first time.