A Seamless Global Strategy Includes Hong Kong And China

Saturday, December 1, 2007 - 01:00

Editor: Describe your role with the firm .

Pollack : I am Director of Strategic Planning and a partner in the firm. The biggest part of my job has been the mergers and acquisitions the firm has done over the past six years.

Editor: Would you describe Reed Smith's growth strategy?

Pollack: I am a part of a management team that started managing the firm in late 2000. Then, we were largely concentrated in the triangle between New York, Pittsburgh and Washington, DC. Our clients were globalizing and needed seamless legal advice, taking into account the interrelationships of the laws of the countries in which they were operating.

We felt if we were able to be where our clients needed help, they would turn to us. The thinking behind the process was to follow our clients.

That led to a series of transactions, beginning with a combination in 2001 with Warner Cranston, with offices in London and Birmingham, which projected us into the ranks of the 10 largest transatlantic law firms.

We had great strengths in life sciences and financial services. There was a tremendous amount of business activity in California in those areas. Also, a significant number of our clients were facing litigation there. In 2003, we combined with California firm Crosby, Heafey, Roach & May, which had about 200 lawyers in the Los Angeles and San Francisco areas.

We did a couple of smaller deals in New York to get our office there up to a reasonable size, close to a hundred lawyers now. We also did deals in Munich and Paris to open there.

We have been busy this past year. With the Richards Butler merger in the UK effective January 1, 2007, we added more than 250 lawyers total in London, Paris, Piraeus, Abu Dhabi and Dubai.

We gained a significant presence in one of the world's largest legal markets, Chicago, by combining with 130-lawyer firm Sachnoff & Weaver in March 2007.

Editor: In this interview, we want to focus on the latest news concerning implementation of your seamless global strategy. Please tell us about it.

Pollack: We just announced a deal with Richards Butler Hong Kong that will close on January 1, 2008. Richards Butler Hong Kong was once a part of Richards Butler London. In 1997 they legally separated, primarily due to changes in UK tax rules. They continued to work cooperatively, but they were not legally the same firm. Consequently, the merger with Richards Butler in London didn't bring Richards Butler in Hong Kong.

Editor: What were some of the challenges you faced in entering the Hong Kong market? I gather that also involved some activities in mainland China .

Pollack : The first challenge was getting Richards Butler Hong Kong to say yes. We started our conversations with them when we started our talks with Richards Butler in the UK. We described why a merger would be good for them and good for us. At the time, they were not really looking to do a deal. It took roughly 16 months to reach an agreement.

Another challenge was that Hong Kong is far from everywhere. It's a long trip from either Philadelphia or London where I spend a lot of time. The distance and time zone differences create communications challenges.

Regarding China, Reed Smith Richards Butler UK has a license to practice in Beijing. Although there is a restriction on foreign firms practicing Chinese law in mainland China, there are over one hundred foreign firms that have offices in China. To open an office, you must go through a licensing process with the Ministry of Justice. Even though we have merged with a firm in Hong Kong, we still have to go through that process to open in Shanghai.

Editor: What does a Chinese office entitle a foreign firm to do?

Pollack : We will be able to represent foreign corporations in China, but not to practice Chinese law. For that you have to use local Chinese counsel. Richards Butler Hong Kong does a tremendous amount of work in China. For Chinese law advice, they have a cadre of Chinese firms they use depending on the type of question involved or location.

Many deals involving Chinese or foreign companies get done using some law other than Chinese law. We can help there. We can also represent Chinese companies going outside of China.

Editor: Why was it so important to combine with Richards Butler?

Pollack : They are one of Hong Kong's top firms. They brought expertise in all the practice areas our clients might need. To mention a few, they have very strong corporate, M&A and securities practices as well as strong regulatory and litigation practices.

We are starting from day one in Hong Kong in a position we could not have hoped to achieve alone in any reasonable period of time. That's exciting.

Editor: How do you assure that your clients benefit from your presence in Hong Kong?

Pollack : We share with lawyers from our new offices what we know about clients they will be serving so that we can maintain seamless service. We've already had terrific responses from our clients and received some significant work.

Editor: Hong Kong is probably number three in the securities markets of the world. What are your capacities in terms of handling a securities offering on the Hong Kong exchange? I understand that most Chinese companies go to Hong Kong, rather than using the United States or London exchanges.

Pollack : Richards Butler Hong Kong has done more than 200 IPOs over the last several years. They are plugged into the securities market in Hong Kong. Tying together New York, London and Hong Kong is a great benefit for clients. We can handle the work in any of the major securities markets they choose.

Editor: Bringing firms together seamlessly is a problem of blending both cultures. How do you go about being sure that both sides are going to be happy with the marriage long range?

Pollack : We spend a lot of time on integration. I and another Reed Smith partner from Washington have been living in London for over a year now working on the Richards Butler integration.

Tom Todd, a senior Pittsburgh partner, has been in Hong Kong since September. Previously, he spent four of the last six years in London helping us with integration there. Tom's role is to help identify client opportunities and to aid integration by serving as the interface between the Hong Kong lawyers and Reed Smith. He is our most experienced partner in doing that, and he does a great job.

Editor: What are your future plans for operations in China?

Pollack : We have the license in Beijing and we'd like to expand there. We intend to apply for a license in Shanghai and open an office there. We are getting started with the help of Richards Butler Hong Kong lawyers who know that market as well as anyone.

Editor: Is there growing interest among existing American clients in operations or sales efforts in China?

Pollack : We do a lot of work for Fortune 500 companies, most of which have some sort of operation in, or are thinking about, China. Some have deals that they need help with. Others are at the exploratory stage. We see China as an important economy now and one that will be increasingly important over time.

Editor: You have offices in many other parts of the world. Do you find that you are not only representing American clients, but local clients through those offices who might be interested in China?

Pollack : Absolutely. We have close to 400 lawyers in Europe representing many European companies. We have a small but powerful practice in the Middle East. China is attractive to businesses throughout the world.

Editor: With lawyers dispersed all over the world, how can they come to feel they are part of one firm?

Pollack : Our success largely depends on our lawyers getting to know one another. For instance, we hosted all the firm's litigation lawyers in Chicago, including five of the partners from Richards Butler Hong Kong. It was part of the process of getting them to see the firm and meet our people from the U.S. and elsewhere. There is no substitute for the personal relationship that develops at such events.

Editor: Part of the culture of a firm is pro bono and diversity. Does the firm reflect those client interests in its international offices?

Pollack : We have active diversity and pro bono programs in our existing offices throughout the world. As we move into new markets, we consider how to appropriately introduce diversity and pro bono.

In Hong Kong, 75 percent of the lawyers are of Asian descent. Diversity means something different in Asia. You can't just run in and say, "Here's the program, follow it." You have to think about how it works, what client expectations are and how different markets deal with these matters.

You need to have cultural sensitivity. One of the reasons we have been successful in getting deals done is that we have tried to be sensitive to differences.

Editor: Have you introduced technologies that are helpful in integrating a global operation?

Pollack : Technology is extremely helpful. From a communications standpoint, computers and videoconferencing make a world of difference. But you can't do it with just technology. The personal touch is still very important.

Editor: In such a large corporation how do you remain responsive to the needs of corporate counsel?

Pollack : We have a program within the firm led by a Director of General Counsel Relations who talks to general counsel to find out how we're doing and how we can be more helpful, to remain responsive to their special needs. Take communicating: some general counsel like everything to run through them; others like to have things coordinated locally.

Editor: Are there any other aspects of managing such a large organization that you would like to mention?

Pollack : The firm had 600 lawyers when we began to implement our strategy. Today, we have 1,500. We were in one time zone before. Now we operate 24 hours a day. These things challenge your assumptions. You constantly have to ask why we are doing things the way we are doing them and make sure it still makes sense.

We have to be smart about the way we manage the firm, and how we can enlist others in the firm to help us.

Please email the interviewee at mpollack@reedsmith.com with questions about this interview.