Firms of attorneys are reclaiming their traditional roles. The Enron debacle, in which tricky accounting practices and lawyers' failure to expose them eventually ruined the US company, has reintroduced the schism between different types of service. Accounting firms and banks had been moving into legal turf, and the lawyers were slow to respond.
But the tortoise has won in the end.
Webber Wentzel Bowens senior partner Edward Southey says multidisciplinary practices, as the firms that marry different services are called, give rise to conflicts of interest which are irreconcilable - "they compromise independence".
Goldman Judin Maisels senior partner Michael Judin puts it even more strongly. He says the multidisciplinary model is a "disaster".
So it's back to the old model - companies go to law firms for legal advice and to accounting firms for tax and audit advice. "A lawyer cannot run an accounting firm and an accountant cannot run a law firm," says Judin. He says the model has not worked in the US and Europe either.
In the 21st century a different model of law firm will emerge, says Deneys Reitz senior partner Michael Hart. Large law practices with more than 70 directors or partners will dominate the profession.
Another trend SA firms are starting to catch on to is international growth. The growth and geographic reach of US and UK law firms is accelerating with cross-country and intercontinental mergers. The boldest deal of late remains the three-way merger of London's Clifford Chance with New York's Roger & Wells and Germany's Punder, Volhard, Weber & Axster to form the world's largest law firm.
According to the American Lawyer, at least 20 of the top firms in the US have more than 10% of their attorneys stationed in foreign offices.
Small to medium-sized firms still dominate the SA legal profession. For these lawyers, globalisation is not a concern.
Werksmans executive director Charles Butler identifies several possible generic strategies that are available to SA law firms:
- Adopt the global route of Clifford Chance. Competitors are still waiting to see whether the combined firm does win a lot more international business; or
- Be part of a global multidisciplinary practice; or
- Remain a dominant national firm with strong links to foreign law firms and clients.
Werksmans opened its own London office last year, primarily to advise SA clients in the UK, and foreign clients and English law firms on SA law. Butler says it is not Werksmans' intention to grow an office in the UK, but rather to build a strong relationship with English law firms.
The firm is also part of the Lex Africa network and a member of Interlex. It has a nonbinding relationship with several African countries whereby the parties refer work to one another.
Webber Wentzel Bowens has also maintained its international venture with the Maitland group. The venture incorporates the estates and trusts businesses of the firm.
Webbers also claims pole position for legal advisory work with 21 transactions in the past year valued at R63,903bn. In second place was Sonnenberg Hoffmann Galombik with only 13 transactions but a combined value of R26,177bn. Third place was taken by corporate law advisers Edward Nathan & Friedland with the highest number of transactions at 41 but a value of only R25,425bn.
