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Sparking a new movement?

In the summer of 2018 I heard Richard Foley, our senior partner, speak about how diversity of thought improves the quality of decision making. Perhaps somewhat bravely, I approached him and asked, ‘how can we better embrace this value at Pinsent Masons?’ I suggested what I then thought to be the solution: a junior board. In the true spirit of our leadership style, Richard gave me, a junior solicitor in my twenties, ownership to go away with a small team (our Director of Knowledge and Innovation Delivery and our Head of Responsible Business, no less) to research and design a board that would work for Pinsent Masons.

In April 2019, after receiving enthusiastic approval, we announced our initiative internally. Within hours I had received hundreds of supportive emails. Our proposal was not, in fact, a junior board. Over the months of research (speaking to internal connections, clients, and business contacts) we designed the Spark Board. The Spark Board takes the best ingredients of many board designs for Pinsent Masons and gives us an ambitious group of eight diverse individuals – from across our international network, from Edinburgh to Dubai and Melbourne. We are all below partner, legal director, and director of operations level, but we have not been subject to an age limit and we are certainly not all lawyers – in fact the group includes a forensic accountant and a responsible business expert. We are not elected representatives either – we have been appointed on the basis that we think differently, have diverse backgrounds, and bring different strengths to the boardroom.

So, we are not a mirror (or shadow) board made up of senior individuals looking to step in to the management board roles, and we are not a junior board aged between 25 and 35 years placed a step away from the management board. We have not followed a template and we are certainly the first ever Spark Board.

Consideration was given to appointing a junior person to the Board instead, but we concluded that creating the Spark Board goes one better. Putting one junior colleague on to the Board to embody the views of thousands of colleagues around the world would place a huge amount of responsibility, pressure, and expectation on to the shoulders of just one person, and it would offer only one person’s perspective. The benefit of the Spark Board is that it offers the collective thinking of eight people from all around the business.

Our aim is to inform the strategic decision-making of the Board in an inclusive way that increases the connection between senior management and junior colleagues. We are doing this in two ways. First, we receive advisory projects delegated from the Board which ask, ‘we’re considering this, what do you think?’ Second, we have thinking projects which allow us to put forward proposals to the Board that we think need attention. Where our advisory projects give the Board a diverse thinking resource and the ability to ‘test the waters’, our thinking projects enable us to put forward our invaluable insight given our proximity to our people on the ground.

At the end of our term, we will all be replaced by new applicants to ensure that we have a completely fresh set of individuals bringing new ideas. This is important in ensuring that decision-making is informed by the widest possible range of talents.

As always, the proof will be in the pudding as to the success of this project, but a good benchmark for our firm and our stakeholders will be whether the Board choose to implement the Spark Board’s proposals, the success of such initiatives, and whether our community feels better engaged with our Board on a global scale.

 

“As we continue to transition our business we know our decision-making needs to be informed by the widest possible range of talents within our business. If we want our business to work better we have to be prepared to push a few boundaries and that includes around key decision-making. I am really excited about the contribution the Spark Board will make to that and I’m looking forward to working with the team”

Richard Foley, Pinsent Masons’ senior partner

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The real value of cultural diversity

I admit that when I first discussed the opportunity of joining Demarest, I was surprised by their approach and by the interest from one of the leading local – and most traditional – Brazilian law firms in bringing on board a foreign lawyer with an international career. It is true that I had been in Brazil, spearheading the LATAM project of one of the most prominent Iberian law firms and that, in a short space of time, I had gained a good positioning among foreign European investors for their regional interests. It took little time to realise that their initiative was part of a well-planned strategy and a clear bet on cultural diversity, which has proven very successful for both the firm and its clients.

This is a rare characteristic in a country (and region) where it is not very common to have fully institutionalised firms (i.e. not dependent on one individual or small group of individuals, such as the founding partners, name partners, or current managing partners). Indeed, Demarest had successfully overcome a very well-driven generational succession that led to a refurbished modern firm with clear objectives and a very interesting open-minded approach to the way they could best serve clients.

Clients have to face increasingly sophisticated and global challenges that occur in different markets. To attend their needs and be able to adjust to the demanding specialised counsel that they require calls for the capacity to understand their concerns and multi-faceted implications from a global, regional, and local perspective. Brazil is a prominent market in the international business arena and it is connected with most of the other business hubs worldwide. Its players expect advisors with a cultural and geopolitical background that helps them spot and understand the opportunities and risks of this playing field, when compared to other alternative markets.

An organisation becomes, in reality, an international reference not only for having a physical presence abroad or attending foreign clients, but also, and most importantly, for including in its ranks qualified and experienced professionals with different backgrounds. Acknowledging this fact, clients have also incorporated this multicultural diversity factor when configuring their teams, especially those tasked with expanding into new markets or simply those operating outside of their homeland. They understand that it is in this way that they achieve higher levels of competitiveness and dynamism. Professional service firms in general, and law firms in particular, need to keep up with this trend to be able to connect with the clients’ representatives and deliver up to their high standards based on best international practices.

Demarest is no different. In fact, they were pioneers in this regard. By the time I joined, several other international lawyers had already been trained and had made partnership within the firm. This allows a differentiated value proposition for clients that receive, alongside the legal advice that they seek, a highly empathetic service based on a better understanding and capacity to explain (and anticipate) their needs and in navigating the requirements and pitfalls of a different business environment.

Another driver to support this multicultural policy lies in the so-called ‘war for talent’. In such a battle, the capacity to offer a project and working environment with different personal and cultural profiles, in a well-integrated team of in-house developed and lateral hires, means a more attractive opportunity for new talent who seek enriching experiences.

Typically, M&A lawyers interface between foreign investors and the local entrepreneurs and business owners, contributing to the development and modernisation of the local market. However, we are also known to follow the opposite path, guiding local investors when expanding abroad. Lawyers and firms need to be well informed and prepared to explain, or at least understand, the main characteristics of investment source and destination markets, so that we can guide clients to make the proper connections. Often, decisive factors in the early stage of a successful international plan go beyond the technical knowledge of each specific legal system, and are, therefore, more dependent on properly understanding the cultural characteristics of doing business.

Nevertheless, not all organisations are ready and willing to integrate diverse talent. Achieving a cultural fit is difficult and, oftentimes, failure to acknowledge and integrate such cultural awareness ruins bold and well-intended projects. It is not uncommon for law firms, in many cases traditional organisations averse to change, to encounter endogenous cultures that, necessarily, entail overcoming complex difficulties related to integration and ‘otherness’, proving an even harder to overcome challenge than initially thought. Also, the adaptation factor of the individual is uncertain. Many successful lawyers that once shone in a given organisation fail to measure the size of the challenge they face when changing firms, compromising the quality of service due to a lack of the required flexibility.

At Demarest, my experience, as well as several others, is evidence of our belief in diversity (in all aspects, including cultural) to be solid and aligned with the strategy. This has afforded me a smooth and successful integration and has benefitted the firm with diverse views and experiences, culminating in many initiatives that have enriched the organisation. But most of all, the firm’s strategy and adherence to cultural diversity has benefitted our clients through a value proposition with a unique approach, that has ultimately translated into tangible results.

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How plans can change for the better

The thing that surprises many people about me is my experience as a lawyer in Papua New Guinea (PNG). Looking at my career with fresh-out-of-law-school eyes, I’d be pretty surprised myself. Opportunities early in my career led to a less-than-common legal qualification and a keen professional and personal interest in PNG.

When I joined Blake Dawson Waldron as an articled clerk in 1998, I did not expect to stay in private practice. I planned to be a government lawyer, but rejected by the Commonwealth Attorney General’s graduate programme (my CV was ‘not sufficiently commercial’ they said), I was forced to look elsewhere. Now, 21 years into a career as an energy and resources sector lawyer, I still enjoy the irony of this rejection.

Reluctantly propelled into corporate law, I was convinced this was not a world for me. I had no intention of staying in private practice longer than was necessary. This plan, too, was derailed as I discovered early – and to my slight dismay – that I really liked resources law. My interest was piqued during articles and evolved into a more specific interest in upstream gas development and wholesale gas markets. Still later, this broadened to include renewable energy and wholesale electricity markets.

PNG is a resource-intensive economy and large-scale resources projects, historically mining and more recently liquefied natural gas (LNG), have been the key drivers of its economic growth. My early career was spent with firms with large Australian and PNG resources practices. So, with no strategising on my part, I had the opportunity as a mid-level lawyer to work on a variety of matters connected with PNG. Everything which has followed, from my first in-house role with an oil and gas major, to my 2018 admission as a lawyer of the Supreme Court of Papua New Guinea, arose from this experience. I am very grateful to the Attorney-General’s Department!

The first thing anyone wants to know about travelling to Port Moresby for work is whether it is safe. There is no question that everyone – local and visitor – needs to take care in PNG’s capital and it is smart to take local advice. Whatever a visitor’s baseline precautions, unless they are constrained by company policy, everyone relaxes over time. I had a mental block about driving in Port Moresby. I have a bad sense of direction, which doesn’t bother me in Australia (I allow lots of time for detours), but in Port Moresby it is important to get from A to B by a direct route, with no surprises. The work around was simply to get a colleague to direct me from the passenger seat on the first trip and then to have a carefully prepared map. It helps to have no shame about seeking help.

Working in PNG has its challenges but my experience has been that the country accommodates foreigners very well. Estimates vary for the size of the population and the number of languages, but common figures are more than 800 languages in a country with approximately 8 million people. Port Moresby is home to diverse people from across the country. As a colleague pointed out, the locals are dealing with difference every day, whether there are foreigners in town or not.

Business has a different pace and face-to-face meetings are extremely important. It is also important to have local advice on key political and business relationships. On the legal side, local assistance is always required to advise on PNG law and, in many cases, to obtain information from statutory registers. Subscription services for legislation are updated on a six monthly basis, so it can be necessary to visit the Office of Legislative Counsel’s library for physical copies of the latest statutory amendments and gazettes.

Other than accepting a different pace for business and the limitations of the internet, I’m not conscious of needing to adjust enormously in PNG – but I am sure that adjustments are being made for me. Just one of the many things a foreigner has to accept with humility.

My own legal experience in PNG is largely in connection with oil production, gas developments, and mining developments, with some work in the agriculture and food production space. The economy is resource-intensive but the foundation of the rural economy is agriculture, most of it small scale. Fisheries and forestry are also important sectors. The years following the construction of the PNG LNG Project (at a cost of $19bn) have been challenging ones for the economy but there is cautious optimism for the medium term.

The first ten years of my career were spent in environments where it was a normal part of business to work on PNG matters and to travel there. It is interesting to move away from those environments and to appreciate that it is an unusual set of experiences and an unusual legal expertise. The early connection with PNG has provided rewarding opportunities in a career that has been shaped by the unexpected benefit of not getting what I wished for. n

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Knowledge management needs redefinition, not reinvention

Knowledge management (KM) brings the phrase ‘what’s old is new’ to mind. As a concept, KM is at least 30 years old in the legal sector, and yet there’s newfound excitement for it in the industry within both law firms and new entrants in the ecosystem.

Historically, the discipline has been driven by the need to facilitate information and advice sharing across the firm – given that the traditional law firm partnership model isn’t naturally conducive to proactive collaboration. KM has been about legal, document-based taxonomies, and marshalling legal advice into precedents, practice notes, and processes that are made available for lawyers’ reuse.

The dynamics in the sector are changing with the rise of alternative fee arrangements, demand for matter transparency, and competition from new models of work. Corporate legal departments are demanding predictable outcomes. From a documentation standpoint, lawyers are under pressure to deliver advice in a more consistent and effective format, making handcrafted elegant documents superfluous. The ability to leverage existing information to abet efficiency has never been greater as firms look to reduce the cost of service delivery.

The cracks show

Despite law firms and some lawyers appreciating the need for KM, adoption still isn’t hugely successful. Legacy technology infrastructure stands out as a key reason. Knowledge is still delivered via old search engines, intranets, practice area pages, and knowhow collections, often on old versions of tools like SharePoint. The interfaces are cumbersome and antiquated, lacking ease of use and providing limited navigation that modern applications offer. Think Google!

Cultural transformation is lagging. Firms are employing data scientists, data analysts, information and research professionals. Disciplines such as legal project management, Six Sigma, and process improvement are being embraced. KM teams need to work with them all, but in the absence of mechanisms for a new, collaborative way of working, cultural friction often poses obstacles.

KM needs redefinition

KM needs a redefinition of its delivery channel and the format of knowledge assets (rather than reinvention) to move away from the traditional content-led methodology of ‘retrieve and read’ towards a more fluid, intuitive and data-driven way of surfacing information. This will ensure that content is created in a way that fits in with how lawyers perform tasks, appearing dynamically at the point of need within their workflows. For instance, legal best practice-style documents need to be transformed into workflow-led content, and things like legal precedents need to evolve into clause banks and recommended positions in playbooks.

Data-driven enterprise search and knowledge go together

For data to take the shape of ‘knowledge’, content needs to be enriched and information needs to be accessible across systems and repositories. A lawyer seeking information on a specific type of matter should be able to access information holistically – from legal advice and documentation, firm expertise, skills and resources, through to time and billing data. More than merely search, the enterprise search engine should be a data repository that can be queried from multiple angles and by different professionals – lawyers, business development executives, and client-facing service teams. It should be an engine that ‘joins data’ to provide analytics on the firm’s knowledge – like Google, where a search also provides ‘searches related to’ the original search term.

A data-driven approach delivers analytics that law firms will find valuable. The ability to know how many litigation matters have been executed for a client over a 20-year period, the percentage of success for each, the time spent by lawyers by expertise and seniority, and the billing level for every case, would be great insight. Undertaking the same analysis for litigation activity across the client base would be invaluable business intelligence that could be used strategically for competitive advantage.

This approach will help drive KM adoption among lawyers. Given their quest for evidence, focus on identifying risks for clients, and analytical approach, lawyers are well disposed to data. Offering them the ability to identify risk/opportunity in a format that is visual, well-presented, and drillable to a granular level is more likely to motivate them to engage with KM. This function has the capability to provide the structure, rigour, and governance to make data truly insightful and useful at the point of need for lawyers.

Applying AI to KM is logical

A data-driven approach to KM provides a stepping-stone to applying AI/machine learning to the function. Amazon is an example of a company that has successfully applied machine learning techniques to enterprise search. Doing a search on Amazon and purchasing, say a book on corporate leadership, typically results in recommendations on similar books for the online customer. At the backend, AI is connecting the various facets to surface information at the point of need for the buyer, but crucially it’s constantly cleaning and enriching data through machine learning techniques to ensure incrementally more accurate outcomes for the customer in the future.

AI technology offers enterprise search and KM great opportunity for evolution, within the continuum. KM professionals must be commended for their work thus far. Many have had the vision for the function but were constrained by technical capability. With AI, technology has finally caught up with their mindset. With a combination of old principles, new legal drivers, and modern formats, we’re seeing the rise of the next evolution of knowledge management, at scale, in legal organisations globally. n

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The US is not alone in the battle against bribery

As business crime-related claims go, the one made by the chair of the US Securities and Exchange Commission (SEC) was a pretty big one.

SEC Chairman Jay Clayton chose a speech to the New York Economic Club to argue that the US was pretty much going it alone when it comes to punishing bribery and corruption. He cited figures to back his stance and followed up by calling on other nations to follow the US’s lead in tackling what is an international problem. But does his viewpoint stand up to serious scrutiny? Only to a very limited degree.

His view that the US has spent more than two decades enforcing the Foreign Corrupt Practices Act (FCPA) is a valid enough point to make. In the past five years or so, the SEC has brought more than 70 FCPA-related cases – and these cases have involved misconduct in almost as many countries. Mr Clayton’s argument that the US is ‘doing its bit’ does, therefore, seem to stack up. The FCPA is a strong piece of legislation and the US is far from shy when it comes to utilising it.

But the SEC chair can be taken to task when he claims that the US is acting largely alone; especially as he argues that other countries are taking advantage of the efforts that the US is putting in to tackle bribery and corruption. The US has, for many years, been one of a relatively small group of nations prepared to investigate bribery but the view that somehow everyone else is freeloading is unfair.

The view has also been expressed within the US that because other countries do not have strong anti-bribery legislation US companies bidding for work abroad are up against foreign rivals who are not bound by legislation as far-reaching as the FCPA; meaning the US companies are at a disadvantage when trying to clinch deals. But should that not be a reason for the US to be working closer with other nations to eradicate bribery rather than condemning them for what the SEC chair sees as a lack of effort?

Mr Clayton appears to have recognised that as markets evolve, so must the SEC. He should also recognise that the US is not the only place where efforts are being made to tackle bribery.

If we take the UK as just one example, the Serious Fraud Office (SFO) takes a multi-disciplinary approach to investigating bribery and corruption. The likes of forensic investigators, lawyers and computer specialists work closely together for maximum effectiveness. The SFO also works with other UK agencies – not to mention national and international enforcement agencies – to tackle bribery and corruption. It is looking to encourage a culture of co-operation and self-reporting among corporates. Avoiding prosecution via a deferred prosecution agreement – as was the case with Rolls-Royce – is now a possibility. Unexplained wealth orders are just one in a series of measures available to the UK authorities when it comes to targeting the assets of those suspected of being corrupt. And, in the Bribery Act, the UK has a more far-reaching piece of legislation than the US’s FCPA.

These are all reasons why Mr Clayton would be wrong to lump the SFO – and by extension, the UK – in with those he sees as falling short when it comes to tackling bribery and corruption.

But it would also be wrong to think the UK is the only nation taking a more aggressive approach to tackling bribery. Anti-corruption laws may vary significantly from jurisdiction to jurisdiction but many countries are now working harder to combat bribery. Corruption has been made the subject of agreements from bodies as sizeable and varied as the Council of Europe, the United Nations and the Organisation for Economic Co-operation and Development. The claim from the SEC chair that the US is going it alone does seem, at best, a little short-sighted.

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Women in The Legal 500 – A step in the right direction but we need your help

When I joined The Legal 500 a year ago, one of the main ambitions I set out was to improve diversity in our rankings and, in particular, the proportion of cited women in the UK Solicitors guide. The reason was obvious – women are under-represented at senior levels in law firms and this has also historically been the case in many of our rankings.

Unconscious bias has long served as a barrier to entry for many talented female lawyers who were in many instances not being put forward for recognition, either by their firms or peers. However, with diversity increasingly on law firms’ agenda it was important for us to play our part by raising the profile of talented female lawyers who may otherwise have gone unmentioned in our research.

So, 12 months on, and a few weeks after the launch of the 2020 UK guide, how did we do? While in some areas (shipping being an obvious example) our rankings show we still have a long way to go, in other, marquee City practices, the results show significant progress.

Leaving aside practices with traditionally strong female representation, such as employment, family and some areas of insurance, women now make up more than 20% of all ranked lawyers across a number of high-profile areas.

Our premium M&A rankings, for example, now feature 22 women, equating to more than one third of all lawyers ranked, and the proportion is similar across both mid-market and smaller M&A. Our London private equity rankings, meanwhile – which previously featured no female leading individuals – are now more than 25% female.

For context, it should be noted that these figures include more junior, next generation partners, as well as our new category of rising stars, which recognise the best up-and-coming non-partners.

However, while there is still room for improvement at the most senior level, we believe that by recognising female talent at an earlier stage of their career, we will be able to continue to track them as their career progresses and they – hopefully – reach the top tier of leading individuals in their area.

In some areas, we have already made big strides in recognising women at the top of their game, such as acquisition finance, a ranking which previously included no female leading individuals but which is now more than 20% female after the addition of seven women including Clifford Chance’s Emma Folds and Allen & Overy star Denise Gibson.

Similarly, almost a quarter of the leading individuals in our premium M&A table are now female, compared with just 5% last year, while for white collar and corporate crime, more than one in three of those ranked at the highest level are women.

Naturally, it is disappointing that in other areas there are still not enough women among our leading individuals. However, the pipeline of talent we have found at associate and junior partner level makes me confident we are now better placed to recognise the leading individuals of tomorrow. Overall, I am pleased that we have made significant progress in some areas, but fully accept that there is much more to do, particularly outside London.

So we still need your help. Our individual rankings will not change fast enough if our research team are not told about talented women – and other minority lawyers – within your ranks. While many listened to last year’s call to arms and made a concerted effort to tell us about deserving women within their firms, others simply did not. Indeed, in some quarters there remains old-school resistance to the idea that we should even be asking such questions. Tough.

This is a cause we will be continuing to push so, with the next research period just around the corner, we would encourage you to put forward more of your talented women – and other minority lawyers – for consideration in next year’s rankings. We can only go so far without you.

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All go in Monaco

The Principality of Monaco is well known for the extravagant lifestyle of its high rollers; for the super-yachts that line the marina; the low tax rates; the Grand Prix (the street race, arguably, the most glamorous on the circuit); as the home of numerous high-flying residents; and, more recently, for The Legal 500’s coverage of the jurisdiction. Alright, I’m stretching, it’s more well-known as the home of Lewis Hamilton than it is for the law firm rankings. However, what is true is that we certainly didn’t take a gamble when we decided to introduce a Monaco chapter to the EMEA guide back in 2015, with firms keen to submit to the newly introduced commercial, corporate and M&A, and private client practice areas.

Monaco’s close ties with France, the country’s status as a ‘third country’ with the EU, and its membership of the Eurozone – it adopted the euro in 2002 – combined with its low tax rates have contributed to the sovereign state’s thriving financial services sector. A heavily regulated industry, banking activities in Monaco are frequently subject to, and authorised by, French banking regulations. The country’s banking activity is licensed by the French Prudential Control and Resolution Authority, which controls the activities of banks and insurance companies. Furthermore, Monaco also has a Monetary Agreement in place with the EU which ensures that the regulatory environment remains consistent with that of EU member states. One direct impact of the Monetary Agreement saw Monaco introduce further measures to tackle anti-money laundering and counter-terrorist financing, which came into force in July 2018. Of note was the introduction of an anonymous whistle-blower system that allows employees to report anti-money laundering breaches, as well as the introduction of new administrative penalties and criminal offences that are applicable to both senior executives and entities. Ultimately, these measures have provided a green light to creating a more secure and attractive banking environment.

Away from the banking industry, it is also a particularly exciting time in the country’s real estate sector, with the Portier Cove development impressive in both its scope and ambition. Land is particularly scarce in Monaco and, as a result, the country has been forced to be innovative and inventive in its approach to tackling this. The Portier Cove development is a $2.4bn land reclamation project which will see the seabed dredged and the land filled with imported sand before construction work begins on a new development. The completion date has been set for 2025 and will see the creation of residential and public space on what is currently the Mediterranean Sea. Residential space remains at a premium as Monaco continues to be a popular destination for jet setters drawn to the sun, opulent lifestyle, and the (equally sexy) lack of a personal income tax levied on residents – a major draw if you back yourself to clean up in the casinos of Monte Carlo.

Ayrton Senna is ubiquitous with the Monaco circuit due to his record of six race victories – the most of any F1 driver. This outright dominance is not seen in the Monaco legal market, perhaps inevitably due to its size and the number of practice areas, with a number of firms across the paddock all heavyweights in the market.

Unsurprisingly for a country considered a tax haven, the work featured in firms’ private client submissions has tended to focus on wealth management, succession planning, asset protection, and related contentious matters, with firms acting for the ultra-high-net-worth individuals that reside in the sovereign state. Reflective of the fact that a high proportion of Monaco’s residents tend to be foreign-born, practitioners in this area include those who are English, French, and US qualified.

CMS Pasquier Ciulla Marquet & Pastor and Gordon S. Blair Law Offices have sat at the top of the private client leader board since the introduction of the Monaco chapter in 2015. With a focus equivalent to the Formula One World Constructors' Championship – meaning the elite law firms in a rankings context – over the first few years following the introduction of the chapter, it was not until 2018 that we first introduced individual rankings. We recognised only two leading individuals in the inaugural private client leading individual ranking before expanding this significantly in 2019 with eight individuals now featured. We are yet to identify the bright, young prospects in the private client market and, at the moment, do not have any next generation lawyers (NGLs) for this practice area.

The situation only improves marginally when we also consider the commercial, corporate, and M&A ranking, with just one individual identified as an NGL in this area. This largely seems to be representative of the senior status of many of the lawyers in the market, with the vast majority well-established practitioners with considerable experience in the Monégasque market and, frequently, other jurisdictions. With succession planning an issue for all firms, regardless of size or location, it will be interesting to see which stars begin to emerge on the rankings grid in the years to come. n

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Indonesia’s fintech revolution

‘Indonesia needs a financial revolution, which will ultimately democratise access to the best financial products.’ These are the words of Claudia Kolonas, founder of fintech start-up Pluang, which recently received $3m in funding from Indonesia tech giant Go-Jek and is one of 167 fintech start-ups now operating in Indonesia.

The demand for fintech is quite simple: Indonesia is the fourth most populous country in the world but half of the population (approximately 132 million) do not have access to a bank account. The country is a series of archipelago islands and many locals do not live close to a bank branch, or have the infrastructure to easily travel to one. This gap in the market is substantial, with a Redseer Report forecasting the fintech market to be worth $50bn in 2023, a major leap from its current valuation at $7bn.

Another factor at play is Indonesia’s emerging middle class and their increased spending power. Nielsen’s 2018 Conference Board Consumer Confidence Survey found that Indonesia is the third most optimistic country in the world after India and the Philippines (developing countries tend to be higher than developed). The index assesses consumers on their job prospects, spending intentions, and outlook on the economy.

‘Indonesia is increasingly seen as a market not to be missed by investors,’ says David Dawborn, senior international counsel for Hiswara Bunjamin & Tandjung, a Jakarta-based law firm which works in association with Herbert Smith Freehills.

‘It makes up more than one-third of the population in Southeast Asia so in terms of size it is definitely an attractive market for investors looking to expand in the region. For fintech players, Indonesia is also attractive because of the relatively high smartphone usage and internet penetration as well as affordable mobile data.

‘Most of the activities currently revolve around the electronic payment and online lending sub-sectors, but we are starting to see more initiatives in relatively newer sub-sectors, such as insurtech.’

Electronic payments are typically conducted through digital ‘e-wallets’, which as the name suggests is a service that allows you to make transactions and store money through an electronic device. Leading the way in this space is GoPay, a spinoff of Go-Jek – Indonesia’s first ‘decacorn’ company (valued at over $10bn). According to The Jakarta Post, transactions made using GoPay in February alone reached $6.3bn, nearly 70% of Gojek’s total transactions.

The company emerged from humble beginnings as a moped ride hailing app in 2010, which was in demand due to the notorious traffic problem in Jakarta. Coming to the close of 2019, the company is expected to raise another $2bn, with major backers for the company including Google, Mitsubishi, Visa, and Chinese gaming giant Tencent Holdings.

For online lending, a number of peer-to-peer (P2P) lending platforms have emerged where lenders and debtors are matched with one another. The figures for companies in this space are particularly impressive with the SME lending service Koinworks receiving $16.5m in funding in June, while JULO, which provides consumer loans, received $10m in funding in September. The Indonesian financial services authority – OJK – found that registered lenders have channelled $1.1bn in loans to 2.8 million borrowers since December 2016. However, the growth of P2P lending has not been completely positive with a number of cases of loan shark behaviour. These instances have encouraged the OJK to input stricter regulations on the market.

‘The challenges typically revolve around the complexity of the regulatory framework but the government and regulators are continuously trying to improve this,’ says Dawborn. ‘In fact, they have been generally supportive of fintech developments by adopting a light touch approach and partnering with fintech associations.’

In January 2019, new regulations were introduced by the OJK to create a much clearer legal framework for fintech. Key issues these new regulations addressed include consumer education, data security, and preventing any criminal activity. Fintech companies are registered through a ‘sandbox’ approach where they operate at a small scale under the authority’s supervision. The general aim is to control the rapid growth of fintech in a way that, hopefully, won’t stifle further growth and innovation.

As for the legal market, a number of law firms are capitalising on the major deals being done in this space. Indonesia has a closed legal market so many domestic firms operate in association with international firms. For example, Herbert Smith Freehills’ affiliate, Hiswara Bunjamin & Tandjung, recently advised the Chinese tech giant Taobao on a $1.1bn investment into the Indonesian e-commerce company ‘Tokopedia’; Baker McKenzie’s associated firm, Hadiputranto, Hadinoto & Partners, represented the Indonesian conglomerate Astra International on a joint venture with the Hong Kong fintech company WeLab for a separate P2P lending platform in Indonesia; and Allen & Overy’s associated firm, Ginting & Reksodiputro, advised Go-Jek on its acquisition of three of the country’s leading fintech businesses.

It’s also important to note that the major Indonesian banks have by no means turned a blind eye to the growth in fintech, and have set up venture funds that invest specifically in fintech start-ups. Bank Mandiri, the largest state-owned bank in Indonesia, has a venture fund dedicated specifically to fintech start-ups and has a budget of $37m.

Looking towards 2020 and beyond, Dawborn believes that fintech will continue to grow and expand. ‘It is an interesting sector to watch and be part of because of the constant innovation and interaction between the traditional financial services institutions and the new players.’

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Per M. Ristvedt: The benefits of being ‘first’

As a business, how has Schjødt evolved since you have been at the firm?

What has changed most over the years in Schjødt is that there is a need for the firm to be organised and run in an optimised manner, since the response time in regards to many of the assignments are often quite short. This means that the firm needs to be very effective in allocating matters to the people with the right skills and who also have the time to serve the clients within the time frame they expect or demand. Then, you also need to have lawyers who connects well with the clients.

What do you think are the top three things most clients want, and why?

First, clients want the right legal advice. Second, it applies value if the legal advice is also commercially viable (if possible).

Third, the advice must be provided within the timeframe the clients need it. If the lawyer does these three things, and otherwise is engaged in the matter and available to the client, the clients’ expectations are normally met or perhaps even exceeded.

What are the biggest challenges facing firms in Norway?

The Norwegian industry has not yet faced any big challenges, in my opinion. The market has been good, and demand for our services has been quite constant, despite the oil crises in 2014 and onwards. The way we see things is that the firms who cannot act as a one-stop-shop may experience some challenges in the years ahead. This is one of the reasons we decided to merge with the Swedish law firm Hamilton, so that we are not only a one-stop firm in Norway but in the Scandinavian region.

The merger with Hamilton is the first of its kind in the Nordic market. What led to the decision to make this move into the Swedish market and to be the first Norwegian firm to merge with a Swedish counterpart?

The main reasons for the Schjødt-Hamilton merger are that we become the first leading law firm in Scandinavia to establish operations covering both Norway and Sweden, which provides new and further growth opportunities in Scandinavia.

Hamilton is considered the perfect match – not too big and not too small. Via the merger we become the biggest law firm in Norway. Schjødt also becomes one of the largest law firms in the Nordic countries and thereby a significant player in the Scandinavian market. We will become about 250 lawyers. Combined, after the merger, the M&A team at Schjødt will be the market leader in the Nordic region.

Why do you think it has taken so long for there to be a cross-border merger of this kind?

We know that other law firms have contemplated this, but none have had the guts to try it. When the merger was announced several of the other firms in Norway complemented us and actually told us: ‘This is impressive, only Schjødt could do this.’

What impact do you feel this will ultimately have on both the Norwegian and Swedish markets? Do you feel others will follow suit?

Maybe, it’s hard to say. If it should happen, we welcome the competition and Schjødt will have an edge as being the ‘first mover’.

Which aspects of each firm do you feel will most benefit from the merger?

We have analysed this carefully, and we actually foresee opportunities and growth possibilities in most departments of our firm. As indicated above, we believe the merger will be particularly noticeable within the M&A segment.

How will your client base benefit from the merger?

Sweden is Norway’s most important trading partner in the Nordic region. We believe clients will benefit via seamless and first-class service to clients with operations in the Norwegian and Swedish markets.

With each firm having its own unique culture, how are you approaching combining the two cultures into a cohesive firm, particularly regarding the differences between the Norwegian and Swedish legal markets? Do you think there will be any challenges?

You are right that there are some differences in cultures between the firms and also in the Norwegian and Swedish legal markets. However, these are matters that have been carefully considered, and we see them more as opportunities. The respective firms are fully aware of what is expected of each other. Furthermore, both firms really wanted this merger. We have a very strong and joint belief in both Hamilton and Schjødt that this merger will be a success and we will work hard to make it happen.

What are the key aims for the firm beyond the merger? What do you hope to accomplish going forward?

The merged firm will become a truly international law firm, with offices in three countries. While Sweden is Norway’s biggest and most important trading partner in the Nordic Region, England is Norway’s most important trading partner in Europe. Such a Scandinavian venture as the merger between Schjødt and Hamilton represents, thus provides greater growth opportunities both in Norway, Sweden, and also in England.

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Marta Colomar-Garcia: Diversity is our strength

As administrative managing partner you lead the administration of Diaz Reus’ 27 global offices. Can you tell me a bit more about how you came to be in the role?

I have had this title for two and a half years now. I started as an associate at Diaz Reus in 2009. When I started at Diaz Reus I was the only woman attorney and the only foreigner. I am actually from Spain and I am a qualified lawyer in Spain as well as in the United States. I worked really hard as an associate. (I have plenty of stories about my early days – lots of stories of sleepless nights and cancelled vacations.) After six years I was promoted to partner. Michael Diaz, Jr, our founding partner, really believed in my work, my dedication, and my professionalism. Being the only woman partner in the Miami office, the firm’s headquarters, gave me a voice at partner level and I was able to recommend certain changes to the procedures in the firm. Those were heard and adopted. As a result, things improved. Michael Diaz, Jr appreciated that I cared so much about making things better and as a result I was promoted to administrative managing partner. I was very humbled and took that position with great honour.

It is noted that you are bilingual and able to arbitrate in both Spanish and English in Miami. Are there not many attorneys who can do this?

No, in my experience not many US lawyers can do it. Miami has become a hub for arbitration, especially for Latin American clients. Being able to have your lawyers handle an arbitration both in English and Spanish is an asset. That does not only mean being able to speak the language or understanding the culture; it also means understanding the civil law system. We have achieved that by hiring lawyers with degrees both in the US and in civil law countries such as Colombia or Spain. That gives the client a strategic and financial advantage. Hiring local counsel everywhere can get expensive, not only because that requires different retainers and fee structures, but also because clients need more staff in-house to keep track of everything. When one law firm can deliver everything everywhere, the client saves money, and who doesn’t like that?

What has changed within the firm during your time there?

A lot. When I started as an associate in 2009 the firm was an international arbitration and litigation boutique that was starting to grow. In ten years we have reached new markets and are servicing our clients in other areas of the law. We are now a full-service law firm with 27 offices in the world. In 2018 we launched the ‘DRT International Law Firm & Alliance’ to formalise our relationships with the foreign offices, and we celebrate a yearly retreat.

The firm has also grown in terms of diversity. As I said, when I started as an associate in 2009 I was the only woman lawyer and the only foreigner. It was a very different law firm from what it is now. Today our team includes both women and men, and everyone is treated the same. This is part of the culture that comes from the top. Gender-equality is a topic that I really care about, and I always try to give advice and guidance to the younger associates in that regard.

Diversity is something that the firm has worked on a lot. In fact, we believe that our diversity is our strength. If you look at our website you will see that our team is formed by people from different backgrounds and ethnicities, who speak different languages, and have different cultures. Management has certainly seen the value in having a diverse group of people (from lawyers to legal support) as a team and it has become our identity.

Do you think the hire of more female attorneys has changed the firm?

Yes, absolutely. It has brought the firm together more. I have found that women are better planners, which is a great quality as a lawyer. Also, having women on teams boosts group collaboration and improves team processes. Clients also come from all different walks of life. The more diverse we are, the more we reflect our clients, which results in better and more effective communication. Women are great at multitasking and can wear many hats. These are very valuable skills that benefit the team and the firm as a whole.

In addition to the recruitment of more diverse lawyers, does the firm get involved in other diversity-related activities?

We get involved in activities within the community. We are involved in a project with the black community in Miami. That extends to our office in Johannesburg, South Africa. Along with our local partner, we want to help the black community in their quest to achieve fairness in land ownership and land titles. In South Africa the community is 90% black, but 90% of private property is in white hands. We want to help them reach a solution to this problem. The firm has experience in this area through the representation of the Miccosukee tribe here in Florida and their initiative in Congress to enact laws whereby the property that was appropriated from the tribe was given back to them. We are transferring that knowledge and experience to South Africa to see if we can assist them in achieving the same goals.

There is also a group of black lawyers in South Africa who are creating a parallel bar association to support black lawyers and they want us to be a part of that. We are very excited about this initiative.

Is the opening of the office in Johannesburg part of an overall expansion programme or is it the only new location planned at the moment?

We are always looking at different markets – wherever our clients have needs we try to set a footprint so we can assist them seamlessly. We want to serve our clients locally and meet the clients where they are, with the capacity to assist them in everything and everywhere. I think that we have done that very well and continue to do so. But opening a new office involves careful thought and research regarding not only new hires, but also regarding the new market’s practice characteristics, rates, clients expectations, and local idiosyncrasies. The firm’s expansion programme aim is to have a local footprint in a global world.

What would you say your biggest challenges are as a firm?

The biggest challenges come from technology and client demands. Clients demand more for less, and the only way to achieve that is through technology and making processes simpler. Today there are programmes for everything from time-keeping to brief-writing. However, law is still a very conservative profession and sometimes it can be challenging to have everyone adapt to new things.

Is there anything else about Diaz Reus that you think sets you apart?

I think we are unique in many ways. All our cases have an international component: either the client is from outside the US, or the cause of action arises in another country, or the applicable law is foreign. Our cases involve complex issues of law and are intellectually challenging. They are all different and that makes it fun. We are a big law firm in terms of size and in terms of the type of cases and deals that we handle for our clients, but we do not sacrifice our family-oriented way of doing things. That reflects on the type of work we do and the attention that we devote to our clients and their legal matters. We are not a volume law firm and are lucky to be able to choose what cases we like. The culture of the firm is to make everyone feel part of the team – part of the Diaz Reus family.