Firm data, industry data and supplementary interview data in this study all provide strong evidence of the growth of global law firms, although these are mainly headquartered and parented in the USA and the UK at this time. These are the two largest industry locations for legal services in the current world market. Our interview data with very large UK law firms have provided evi- dence that senior managers within such law firms perceive continued interna- tional expansion as a defensible and advantageous strategy for legal PSFs. Our research questions arise from such international growth and change.
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Given this industry change and the shift in the size and shape of law firms, the following research question arises:
1. What have been the managerial and organizational implications of the globalization of legal PSFs?
International and global strategy literature suggests that cross-border inte- gration and coordination are the key to successful implementation of a globalization strategy (Ghoshal and Nohria, 1993; Bartlett and Ghoshal, 1993).
We therefore ask two further questions:
2. What have been the main types of managerial and organizational responses to international integration and global coordination within legal PSFs?
3. What are the key implementation issues that have arisen for legal PSFs and how have they approached them?
Methodology
This study uses qualitative case-based research. As explained in the literature review section, there is little specific research directly related to the study of law firms. There is still less research relating to either the internationalization or globalization of law firms. Therefore we regarded this research as explora- tory in nature, seeking to elicit the views of lawyers within their frames of reference, as well as those of other professionals working within law firms, without imposing our preconceptions. The most appropriate method to achieve this was in-depth personal interviews (Jones, 1985). Our interest was in finding out from the perspective of the industry participants what major changes had occurred in the last ten years (the time period most respondents regarded as relevant) and how they and their firms had responded. We were particularly concerned with internal changes as part of understanding how firms perceived and managed the process of globalization. We explored the views of managers concerning significant internal organizational changes made within the last five years and particular difficulties related to such changes.
The data relate to a particular sector of the legal PSF industry, namely very large firms. Our data are drawn solely from UK rather than US firms (although one interview was carried out with a US lawyer at a US law firm operating in London as part of contextual triangulation of issues). This UK emphasis reflects the different historic internal practices between UK and US firms, such as ‘lockstep’ versus ‘eat-what-you-kill’ remuneration. We have sought to control for these differences by focusing on UK firms, since such
differences may give rise to different potential organizational barriers (not least, financial ones) attached to continued international growth and cross-border integration for US and UK firms respectively. We have focused on the large City law firms whose activities are corporate client based and who, following their clients and as a defensive move against competitors, are developing global strategies for increasingly global markets. In this chapter, we use data from two top 10 firms that had pursued different routes to inter- national expansion: one by acquisition, the other by building an alliance network.
In-depth semi-structured interviews (Yin, 1984; Lee, 1999) were conducted with senior partners, partners, associates and non-legal professionals at UK City law firms (‘Magic Circle’ and secondary tier), chosen from the top 10 of the Legal 500 (Legal500.com). Clients and non-UK partners of UK firms (German, Swedish and Spanish) were also interviewed. All interview data are treated as confidential. The interviews were guided by a short series of topic questions identified from the experience of other PSFs, a survey of articles in the financial and trade press (for example, The Lawyer, Legal Week, Legal Busi- ness), and the literature on PSFs and the internationalization/globalization of service industries. The topic guide for interview questions was piloted with lawyers to ensure common understanding of the terminology used. This pilot process was immensely helpful in making the questions more precise to survive the detailed legal scrutiny of our interviewees. The topic guide is provided in Appendix 8.1.
All interviews were recorded and transcribed. Each interview lasted between two and two and a half hours. Respondents were encouraged to speak as much or as little as they wished about industry and organizational characteristics and issues. We only probed to seek clarification and to explore their comments further where more detail was required. Content analysis of the interview transcripts was carried out initially to identify themes and then responses were sorted and coded by theme and each theme allocated to one of seven managerial challenges (see Table 8.1). While the questions in our topic guide were derived from the relevant literatures, we allowed the themes to emerge from the interviewees’ responses.
Content analysis (Krippendorff, 1980) was conducted independently by both authors. Within the context of the research aim and following Miles and Huberman’s (1994) framework, we both noted dominant themes in the data and drew links with previous literature. From this, organizational implications, managerial responses and implementation issues arising from the pursuit of internationalization strategies were identified. We then each compared our independent analyses. Inter-research differences were resolved through discus- sion and reference back to the transcriptions, as suggested by Miles and Huberman (1994).
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Findings
The increasingly competitive marketplace for legal services and the interna- tionalization of the marketplace for such services have prompted a decline in professionally autonomous lawyers and an increase in managed firms. The managing partner has replaced the senior partner. Globalization of legal services has led to firms developing international strategies which have had a profound impact on the organization structure of the legal PSF. Irrespective of the initial difference in international growth strategy (whether through acquisition or alliance), similar strategic and operational issues were found to apply to the management of practice areas across different national legal jurisdictions and the development and coordination of compatible (and occasionally common) cultures, systems and processes.
This section outlines our findings in relation to our three research questions.
We have organized them into sections on the managerial issues arising from the creation of large cross-border legal service organizations; the firm responses to these issues, and remaining implementation issues within the firms. Quota- tions from interview transcripts are used to illustrate the nature of these management issues and the tone of the responses.