Returning from nearly a full week in Prague–delivering the keynote at the second annual 2017 Innovation Legal Services Forum and meeting with firms there–a few reflections.
A very few cities in the world are truly global centers: You can count them on the fingers of one hand. By “global center,” I mean not just for law and finance but most importantly for intellect, culture, the performing arts, and higher education. These cities typically also display genuine and rather artless sophistication in everything from fashion, media, food, and architecture, to diversity of streetscapes and street life. This necessarily entails openness to newcomers, new blood, diversity in national origin, and creed.
Be that as it may.
A substantially greater number of cities are prominent in the next tier: Critical centers of commerce and culture in a national or regional context but not so consequential on the world stage. What this tier of cities may have in common, at least when they’re located within the span of a region viewed as somewhat coherent (“Benelux,” Central America, the Mideast) or certainly when within the same country, is that they can more or less imperfectly “substitute” for each other.
I anticipate objections to this bald and facially reductionist statement, and so that you understand, I’m not positing that Dallas and Houston, San Diego and Phoenix, or Singapore and Hong Kong are interchangeable; I’m suggesting that if you understand one you already are well along towards understanding the other, and–more to the point–from an economic and commercial perspective you may be able to do business from one or the other without needing bricks and mortar in both.
I offer this slightly speculative observation to, I hope, put what we learned about Prague’s legal industry on the ground there in some context.
The key issues facing firms in the market are similar in conception if not execution to those facing firms in comparable markets in regional markets in the US, in Latin America, and in Canada. In a nutshell
- Global and/or extraterritorial/non-indigenous firms are entering the market; this poses the question for the local heros of how to respond;
- Typically there are one or two “kings of the hill” in the local market (although there can be several if you subdivide by specialty–tax, project finance, litigation) and for them the question is whether to stick to their knitting or try to diversify and expand;
- A question on everyone’s mind is whether to ally with one or a tiny handul of carefully selected firms (“best friends”) or to join a regional alliance of firms (LexMundi or a host of others);
- And then you can always decide that “tomorrow is another day,” as Scarlett O’Hara indeliblly recited in Gone with the Wind, and kick the can down the road until it’s someone else’s problem or you decide to pack your bags and leave.. This is a popular option. Best avoided.
The next big question for markets like Prague is how many law firms, and of what type, it takes to saturate the market.