In part one of this look ahead, I discussed how Allen & Overy and Shearman & Sterling’s transatlantic merger will likely shape industry trends in the US, UK and Europe. Now we turn our attention to the rest of the world, starting with Asia – where two trends will continue to dominate.

First, the decoupling of Western law firms from China will continue – Proskauer Rose and Akin Gump being the latest to head for the exits, and Dentons having ditched Dacheng – as the People’s Republic’s economic woes persist, including the possible collapse of heavily-indebted institutions. Law firm departures will also be motivated by data security concerns and increasing price pressure and competition for work from government-preferred Chinese law firms. 

More firms will say goodbye to Hong Kong too, as Winston & Strawn has just announced, although firms with solid banking and finance, regulatory and shipping practices will stay the course, and some contrarians will arrive to take advantage of the thriving fintech and crypto scene in the Special Administrative Region.

The second trend will be more attention to Southeast Asia in general and Singapore in particular. In case anyone thought the city-state had reached its limits hosting foreign law firms, the influx has continued (Ropes & Gray and offshore firm Mourant being the most recent ones to announce plans) and shows no sign of abating. 

At the same time, Indonesia, Vietnam, Thailand, Malaysia and possibly even the Philippines will see interest from foreign firms, including ones in the region (for example, a number of major Japanese law firms have recently opened in Jakarta and Kuala Lumpur). As some of the lower-cost jurisdictions draw labour-intensive manufacturing and assembly operations away from China, foreign law firms will seek opportunities in those countries.

A great to-do has been made about the Bar Council of India's announcement of what appears to be the liberalisation of the Indian legal market, potentially allowing for foreign firms to establish a presence in the country. I am not going to analyse the ambiguities of that statement here, but we are not going to see foreign firms jumping in any time soon, other than perhaps establishing a kind of association without a presence, as Dentons has done with Link Legal, and as Baker McKenzie may be poised to do too. But as India presses its ambition to become the world’s third, or possibly the second, greatest economy by 2047, we will see Indian law firms gazing outward to find foreign affiliations, rather than the other way around. 

The Middle East is roiled by conflict today, but the Gulf states will remain attractive law firm destinations (provided the Red Sea or the Persian Gulf do not become hot war zones), with Saudi Arabia continuing to attract the lion’s share of office openings (eight new openings in 2023 alone). Massive infrastructure, construction and energy projects, together with growing disputes practices, will fuel the growth of foreign firms in the Kingdom and the Emirates. 

Conversely, Israeli law firms, particularly those with robust practices in Israel’s tech sector, will be looking at affiliation opportunities in the US, or possibly Southeast Asia, as Israeli founders increasingly look to funding sources outside the country, a trend that began before the current war. 

As for Africa, South Africa is not likely to see more foreign firms arriving any time soon, but the local majors will be looking to expand elsewhere on the continent, as Bowmans has been doing through its alliance with Gide for access to the Francophone region. Mining and minerals, media, technology, healthcare and infrastructure development, combined with expected high economic growth rates in Western Africa (except Nigeria), will bring foreign firms on a fly-in-fly-out basis, but with little appetite to set up offices. Northern Africa on the other hand may draw interest for foreign law firms to establish a presence focused on energy projects, including offshore wind and gas, finance, disputes and media.

Latin America will see significant advances in infrastructure, energy, renewables, commodities, asset management and capital markets, among other areas. Part of this is a result of renewed confidence in the economies of Chile, Colombia and Peru, where far-left governments are turning out to be more business-friendly than feared, at least for now. There will be no new foreign firm entry into any of these countries, although those already present, including the major Spanish firms, may be bulking up. 

The jury is out on Argentina, the perennial basket case of the continent but one with enormous potential, while newly-elected President Javier Milei tries to jump-start the economy through extensive deregulation and other measures. Very strong local practices with excellent links to leading US and UK firms will continue to dominate the market there. Venezuela will certainly present an interesting prospect for some US firms, now the government is showing some signs of potential accommodation with the US administration – but the economic and security risks posed by opening an office there will surely discourage even the most stout-hearted law firm leader.

Mexico is expected to profit from the nearshoring trend, drawing manufacturing and assembly plants away from China, provided the necessary domestic infrastructure and logistical framework is rapidly developed to accommodate the influx of work. Nearshoring will also trickle down to Central America and probably Brazil as well. This will mean US firms bulking up their presence in Mexico, and probably new entrants arriving there. Local firms will also be looking to attract Chinese investment but will not have the ability to source work directly from China, unlike global firms like Hogan Lovells, Mayer Brown or White & Case, with offices in both countries.   

Mid-tier global firms like DLA Piper and Dentons can be expected to look for new Latin jurisdictions to enter. Central American law firms will be considering regional alliances and mergers in order to better compete for foreign investment-related work. Finally, as an interesting side note, some Latin American firms, like Mexico’s Creel García-Cuéllar, have been landing in Spain, to follow their clients and even to pursue specialist practices, such as Peru’s Caro & Asociados getting in on EU-related compliance and investigations work. Others will follow, as Latin American businesses expand beyond the continent and seek the comfort of having their familiar law firms by their side.  

Robert Bata is principal at WarwickPlace Legal, an advisory firm that helps law firms enhance their international presence and profile through market entry, mergers, strategic alliances and other approaches tailored to the firm’s individual skill sets, culture and aspirations.