Rob and Gerard share their thoughts on global law firm expansion for the coming year and beyond (Part 2 of 2)

Welcome back to the GMT Podcast. In this second part of our two-part conversation, co-hosts Murray Coffey and Rob Bata are joined by Gerard Tanja from Venturis Consulting Group. Together, they continue exploring the evolving landscape of global legal markets, focusing on U.S. expansion, cross-border mergers, and predictions for the year ahead.

If you missed Part 1, be sure to catch up here.

Key Discussion Points:

• How Magic Circle firms are evolving their strategies and looking beyond traditional financial centers in the U.S.
• The rise of mid-market consolidation across Europe and its impact on the global legal landscape.
• Predictions for 2025 and beyond, including potential surprise mergers and sector-driven growth initiatives.

Predictions to Watch:

Here are just a couple of the many predictions shared by our guests. Be sure to listen to the full episode to catch all of their insights.

• Gerard Tanja: "I do think we will see firm-to-firm mergers of UK-headquartered international firms which have a main presence in continental European jurisdictions. ."
• Rob Bata: "We will see U.S. firms continuing to show tremendous interest in Asia, especially as they navigate the challenges of decoupling from China."

Do not miss out. Tune in now to hear the full range of predictions and insights.

Contact Rob and Murray:
Robert C. Bata, Founder and Principal, WarwickPlace Legal
Email: rbata@warwickplace.com

Murray M. Coffey, Founder and Principal, M Coffey
Email: murray@mcoffey.net

Transcript

Murray: 0:00

Music. Welcome to part two of GMTs conversation with venturis partners, Gerard Tania. Listen closely. We have predictions for what to expect in the year to come. I have a question for both of you actually on something Gerhard talked about earlier, and rob you referenced. Rob You were saying part of the success of the AO Sherman. And I think the idea of success is still pending, but it looks like it's in a good pair of was due to them being able to match up financially. It's not always the case when you're bringing in a magic circle firm merging with a larger US firm. So the question I have is, given that that's often the case, will we maybe see some of the Magic Circle firms looking outside of New York or the Northeast of the United States in terms of trying to find a merger partner? Because there are some. There are some very well positioned firms in the Midwest, in the Southwest, Southeast, that could potentially be partners that might have a different financial structure. So just kind of curious as to Will we see the magic circle firms that want to get into the US, pushing the boundaries of sort of where they're the geographic boundaries of where they're looking. New York is always the gateway into the US, but there's very large markets and very capable firms across the country.

Rob Bata: 1:34

Yeah, no, I think that's a very good question, and I think that, in fact, I'm aware that a number of magic circle firms have looked beyond New York and and it's also no secret that some of those firms that are trying to succeed in the US market are doing it through just a series of lateral acquisitions, you know, but some of those have been outside of New York, although they tend to focus on Silicon Valley and so forth. I think the non magic circle firms, clearly and definitely are looking at outside of New York as well. The difference is that for firms, I have to say, I really, I hate the term magic circle, but it's, I guess it's a convenient descriptor. But you know, for the types of practices that the Magic Circle firms have and want to maintain, New York has to be there as a financial center. New York and London are essentially the two significant financial centers in the world. And so if you have one, you've got to have the other one too, as long as you want to be the US. But, but, yeah, I agree that there's certainly plenty of firms, so whether in the Midwest, particularly Chicago, or in Texas and in Los Angeles, that that would be interesting. And by the way, you know Alan over he had discussions with with Melbourne and Myers, which is a California firm that went nowhere, but they've looked and I think they've had discussions with others too. And I think what you're also seeing is that, and this is another interesting area that maybe we won't have time to get into today, but there is a tremendous amount of consolidation going on within the US, some some fairly big mergers, but also a trend within the US to go beyond what have been, what still are, the sort of a cities, and Opening up presence in formerly B cities, C, cities, aka not major, not previously major commercial financial centers, which is why we're seeing from opening Salt Lake City, Denver, Texas is clearly no longer anything but class A. But you know, you're seeing Birmingham, Alabama, Charlotte, North Carolina, is a major, major destination. So there is that development having to do with lots of things, with social movements, with young professionals moving to different parts of the world, rate pressures, but also the need to become national, or at least Super Regional. And I'll just say this one thing, but it deserves a bigger discussion. I think for many of these firms which have not been present internationally, or have not succeeded when they tried to be present internationally, some of these larger domestic mergers in the US are kind of the last step, having to achieve a kind of critical mass before they start seriously thinking about overseas strategies. So, but so that's a long answer to your question. But yes, the short answer

Gerard Tanja: 4:59

is yes. And maybe Murray just, just perhaps as a question to rob as well. But when I was at Clifford Chance, we had discussions with a California based firm which didn't result in anything. Wasn't very successful, but I do think, I do think that some of the, let's say, tier two firms UK, headquartered international firms that have an interest in entering into the US and have a more of a sector focused policy strategy, I think for them, whether it's digital, whether it's energy, etc, I would think that an entry into the US, not via New York, could be a viable strategy.

Rob Bata: 5:48

But no, I think that's right. And I will say, without any detail, the personal knowledge of the fact that that is, in fact, the strategy of a number of those firms, and it makes perfect sense. I think that I like to think back on London in the late 90s, when US firms began to come in in a more serious way. And that was, of course, before y 2k and the big global financial crisis and so forth. But you had a number of firms that were not Wall Street firms, that were smaller Midwestern firms and so forth that came into London essentially wanting to acquire a typical market leading London type of practice, but one that they didn't have themselves and failed for that reason. And had to, had to withdraw, or had to scale down, and so forth. And I think that may not be foremost in the minds of the UK firms, but I think it's that sort of scenario that they would like to avoid. You don't want to waste a lot of time and energy trying to get big in New York when that's not really the sector, as you put it her art. There are other sectors that you're focused on that you could do a lot better with, with a firm from I don't know, St Louis or Kansas City or who knows. And I think sector focus as a general matter, is going to be more and more significant, not just in the US, but but but around the world. And that's why we're that's one of the reasons I think that litigation has reared its ugly head so successfully and so comprehensively around the world, because it's it's a sector, and there are various sectors within it that people have come To realize it can be quite successful and profitable. So

Murray: 7:44

agree with that. Well, now we've come to the time in our podcast where we've we've spent enough time looking over our shoulders. Now we're going to look forward. So we're going to hear from our guest Gerard to talk to us a little bit about his predictions for 2025, and beyond, maybe his top three, and then we'll hear from Rob, and then we'll close out, and we'll have another, another chapter of GMT under our belt. So with it, Gerard thoughts, three predictions, and we will hold you to these.

Gerard Tanja: 8:16

Okay, yeah, I think my my top three predictions for Continental Europe, for Europe and 2025, is that one. I do think we will see firm to firm merges of UK headquartered international firms which have a main presence in continental European jurisdictions. I think that is something that that will happen in 2025 secondly, I do think that we will see more initiatives like the Nordic initiative of shut or the PN initiatives firms that want to really have an integrated European presence. That's my second prediction. And thirdly, I think that as a consequence of those developments we will see in several European jurisdictions, we will see consolidation in the mid and the upper mid market. I think that is what, what? What will happen as a consequence of those international, European developments,

Murray: 9:26

right? Alright,

Rob Bata: 9:28

those, those all sound pretty, pretty good to me. And even if I don't hold you to it, they sound eminently logical. Well, I agree with those. I would also say that in terms of US UK, we will definitely see significant movement of non magic circle firm coming into the US or expanding in the US, possibly through merger, potentially through just some lateral acquisitions. I do think that. That one of the Magic Circle firms that so far has only grown through laterals may surprise us by making an acquisition or a merger within the US. I also believe that US firms will continue to have a tremendous amount of interest in Asia, largely because they have to make their way around China. The decoupling from China will continue. I think that we will be surprised that there may be some new entrance into Hong Kong. No great wave, but there is a FinTech and crypto practice in in Hong Kong, not to mention disputes that notwithstanding the situation there, which causes a lot of concern for a number of reasons, still remains attractive. And keeping in mind that until their MMB is generally convertible, Hong Kong continues to be an extremely important financial center. And beyond that, I would say that we will see much more activity in Latin America, expansion from European firms into Latin America. So those are my three main ones.

Murray: 11:10

Alright. Well, we'll, we'll write those down and put them in the time capsule and and crack em open next January and see see how we did.

Rob Bata: 11:18

We're in 100 years. 400 years. All right, a pleasure to have you on as always. And thank you very much for taking the time. Murray, it's always fun to be with you. Thank you very much.

Gerard Tanja: 11:33

Thank you. Thank you. And fun as always. Thank you very much.

Rob Bata: 11:37

Yeah, and Happy New Year to everyone. Bye, 2020. A healthy one. And so successful,

Murray: 11:43

healthy and prosperous. Thank you absolutely.

Unknown: 11:46

Thank you. Take care. Bye, bye.