FOREIGN OFFICES: 'unrealistic hopes' as 51% set up abroad


UK law firms have rapidly increased their number of overseas offices in the past year, research revealed last week - though consultants warned this is not always the best strategy for providing international work.



A survey of the top 130 law firms showed that more than half now have a branch office overseas, compared to 38% at the end of 2006.



Some 77% of firms provide international services, according to the research, commissioned by accountants Smith & Williamson. Almost three-quarters use associated firms, while 65% make use of local firms, and 59% provide international advice from UK offices.



The Middle East, Russia, China, India and Brazil have proved the most popular locations for new foreign offices. However, UK firms have become more pessimistic about Europe as a potential growth area. While two-thirds of firms thought Europe presented greater opportunities for firms at the end of 2007, one-third predicted that the European market would actually lead to more competition for legal services. In 2006, only 10% of respondents thought European firms posed a threat.



Giles Rubens, consultant at Hilderbrandt International, said firms should be wary about opening a foreign office for the sake of it. He said: 'There is a degree of unrealistic hope that putting someone on the ground will attract huge quantities of inward-bound work, or make you look competitive to your domestic clients operating abroad.



'There are a number of firms with small networks of overseas offices, and there is a big question mark over whether there is a sustainable strategy there.'



Mr Rubens added that the European market is now particularly difficult for new entrants to crack because many UK and US firms are already so well established there.



Giles Murphy, Smith & Williamson head of assurance and business services, said: 'Firms are setting up offices on the back of client opportunities... The middle-ranking corporate firms have done a lot of international Alternative Investment Market work which can require local expertise in Russia and China.'



Rachel Rothwell